invoice on delivered weight

Hi everyone

I'm looking at a distribution process where we invoice on delivered weight (ie the weight that customer says has arrived rather than the weight that left the warehouse). For planning and inventory integrity reasons we still relieve inventory at ship confirm. This leaves us with the problem of adjusting the quantity before invoicing and sales update.

Does anyone have a recommended approach on this. There are 2 problems, it seems to me, a) maintining financial integrity, and b) updating the quantity for invoicing after ship confirm.

For example we ship 20 MT which updates stock in the balance sheet, but the customer says they only received 19MT. We invoice 19 MT which shows in the P&L as Cost of goods Sold, but how do we account for the missing 1MT?

Also updating the sales order quantity after ship confirm is interesting......

All ideas are welcome and appreciated

Ross Wilson

Ross, as someone who has worked in the Energy and Chemical sector for many
years, this is a requirement I've dealt with before. Both World Software
(Load and Delivery) and OneWorld (Transportation) have functionality that
addresses this issue.

What we usually do is a load confirm step for the quantity leaving the
warehouse, and then a delivery confirm step for the actual quantity
received. The delivery confirm step automatically cancels the difference
(undelivered quantity) on the sales order which sets up the order to be
invoiced for the correct (delivered) quantity.

If you deliver confirm a quantity different from what you ship confirmed,
you are presented with a disposition form to account for the difference.
One of the options is to disposition to a gain/loss reason code. The system
will generate a debit to a gain/loss account and a credit to
Inventory-in-Transit.

I can send you a little more on the accounting, as I have the complete set
of debits and credits for the entire order flow using in-transit inventory.

Hope this helps you.

Andy



Andy Klee
www.JDETips.com

delivered weight
left the warehouse).
ship confirm.
and sales update.
and

Ross,

If MT = metric tons, I'm wondering how 1 metric ton of something could
disappear during shipment...

I'm a developer, *not* an accountant or auditor, but modifying the original
order quantity *after* ship confirm sounds like a business practice that
could be fraught with problems and potential for fraud. Why not leave the
original order as it is and create a credit order for the difference in
weight?

Then send the customer both invoices and have them pay the net amount. This
is more auditable, since the credit order carries the original order number
information in the following F4211 fields:

SDOKCO - original Co.
SDOORN - Original Order #
SDOCTO - Original Order Type
SDOGNO - Original Order line #

Steve Landess
Austin, Texas
(512) 423-0935



Steve Landess
V4R4 A7.3 cume9
EDI
(512) 423-0935

Andy,

I have a similar situation with a client that would like to invoice off of delivered weights vs. shipped. Is there anyway to do this without using the transportation module? I was hoping we could just invoice off of shipped and take the deduction in A/R, but there are certain reporting requirements and rebate calculations that will be easier to determine if this adjustment is made on the sales side. From what I can tell, standard ship confirm (without using transportation) will not let you process transactions a 2nd time once the inventory has been relieved.

Thanks

Devin

Devo said:

Andy,

I have a similar situation with a client that would like to invoice off of delivered weights vs. shipped. Is there anyway to do this without using the transportation module? I was hoping we could just invoice off of shipped and take the deduction in A/R, but there are certain reporting requirements and rebate calculations that will be easier to determine if this adjustment is made on the sales side. From what I can tell, standard ship confirm (without using transportation) will not let you process transactions a 2nd time once the inventory has been relieved.

Thanks

Devin

Click to expand...

Hi! A customer i worked with used to do this by manually adding a "volume correction" non-stock line to the sales order to account for the difference shipped vs. unloaded and then invoiced the order

This was a non-stock item with specific GL class that directed the accounting entries to transport variance accounts. The problem was to get the cost accounting correct as they had to manually copy the unit cost from the original stock item line to the new non-stock line. (the cost amount as expensed to a variance account) But they still felt it was good enough given that the number of shipments per month was quite low and did not warrant a modification

Hope this helps
Aarto

That is what my client is currently doing. I am playing with the idea of using Dual UOM where the 2nd UOM represents Delivered Weight. I can then price my order based on secondary UOM and relieve inventory based on primary UOM. At Ship Confirm, I can add the Delivered UOM. Since the client only cares about inventory based on primary UOM, I don't think an inaccurate secondary UOM will effect them in the long run. Just need to test it out now. - But thanks for the respone