FAQ‎ > ‎

How do I deal with delivery charges from supplier? Assuming that I want to maintain the original cost of the items.

posted Sep 5, 2008, 9:37 AM by Unknown user

Some companies would like the cost of inventory to be the landing cost, which means all import taxes, transport charges are included. This way of doing has the disadvantage of boosting up your inventory value, which contradicts the "prudent concept" in accounting. Hence, some people choose to exclude the delivery charges from the supplier, and would like to keep the original inventory costs, delivery charges are not priced in when the user key in the Goods Received Note.

To account for delivery charges from the supplier, there are 3 ways to doing this, method 3 is preferred:


1) Create an inventory item called "SUPPLIER-DELIVERY", and when doing Goods Received Note, always indicate price = 1.00, and quantity = X, where X multiply by price (1.00) is equal to the cost of delivery charges from the supplier.

     At the end of every month, this delivery charges is "charged out" to a customer called "Supplier Delivery Charges" to clear the quantity in the inventory module. The amount cleared here would be charged to "Cost of Goods Sold", as the user is clearing this quantity at ZERO price.

2) Create a separate Credit Memo, and charge this to the GL code of your choice.

3) Without using Credit Memo etc... Users just specify the transportation cost at the point of issuing Payment Voucher. That transport cost could be chargeable to a GL Code of the users' preference.