Inventory – Average Cost Distribution

Problem with Automatic distribution for separate Custom Duty charges

Need help , any advice please. New to Manager, been used for last 7 months (best program ever). I am an importer company, import goods in US$ from U.S. Having problem how to do automatic cost distribution for Inventory Items. Have tried as follows:-

Currency Based : Thai Baht

  1. Create Purchase Invoice in US$ with Freight Charge from supplier (no problem for cost distribution) . Make Payment transfer to supplier in US$ no problem, system convert back to Thai Baht Cost.

  2. Create Another Purchase Invoice for Custom Duty Charges, and post to β€œCustom Duty Clearing (Liability) Account. But this time in local currency Thai Baht.

Then what I supposed to do as if I open the original Purchase Invoice to suppliers is show in US$, cannot do the two transaction contra as in the guide line Add freight-in to inventory item costs | Manager

Have tried used manual allocation method is OK, but I will need to do outside Manager for the proportionate for all individual Inventory Item’s ordered (many different items and price/quantity at a time)

Any advice how to deal with difference currency to do the automatic cost distribution would be highly appreciated.

Many thanks

In your situation, @goldbuck, you cannot use automatic freight-in distribution for separate custom duty charges because the currency is different from the original purchase invoice. You will need to continue the manual method.

However, be sure to see the Note in the section headed Manual allocation of separate freight-in charges. Follow these steps:

  • After cloning the original purchase invoice, change the supplier to your customs authority, who should be denominated in Thai Baht.
  • Delete quantities so the transaction will only adjust average cost.
  • Then edit unit prices to match the invoice from customs. Remember that you can have Manager do any calculations by entering the formula directly in the field. See Perform calculations in number fields | Manager. Be sure to substitute the amounts in Thai Baht.

This approach will minimize the need for data entry. Of course, if the customs bill is combined as a single number, rather than being broken down by item, you will need to do manual breakouts in a spreadsheet.

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Many thanks Tut

This clear up my doubt for the inventory automatic cost distribution.
Will try both outside spreadsheet breakout, and Manager formula,
see which one is more effective.

Thanks again for your kind advice

Further up to the above, I used Performance Calculation in Number Field is the most effective for me,
after cloning and change suppliers.

Meanwhile, what will happen when I repeat new order for same Inventory Item , but with different quantity and freight, custom duty charge. Manager will treat as two different average Inventory Cost (previous v.s. new order) or average out ?

I am now planning for Year 2020 accounting chart.

Thanks again

Manager uses the perpetual average cost method for inventory valuation. So two purchases are unique transactions. But, by definition, average cost takes into account all previous purchases of the item. There is a difference between the purchase transaction and the calculation of average cost using previous transactions. To understand fully how this method works and all of its ramifications, I recommend an internet search. There are many detailed explanations on various accounting sites.

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Many thanks again Tut

Read this topic Importing of goods - #35 by jacekm
It has a fully worked example

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Many thanks Brucanna

Seem very detailed, will go through during this long holidays.

Merry X’Mas