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razorjetin,

may I please ask you, why are you interested in switching from webERP to FA? I am currently researching several Accounting/ ERP systems, and I´d appreciate you could share your thoughts why you would prefer FA over webERP.

Thank you!

Hi twitty1437,

that´s amazing, thank you very much for sharing!

coder71a, you don´t need to open the PO in order to receive the items. In the list of outstanding POs, on the right end, there are three buttons: edit, print, receive.

Hope this helps

Allow me two questions:

What´s the business meaning behind this approach?

What proportion goes to each line?

To me it looks like that in this approach, the order of items would matter. Frankly, I don´t see the business application, but I might be wrong and I´d appreciate you could explain it a bit more detailed.

Hi Janusz,

thank you very much for your comment, it is great to see that FA is indeed an actively developed product, with the community actually having an influence. Great stuff, thank you very much.

Regarding your questions, I´d like to throw in my two cents. As I mentioned, I am neither a programmer nor an accountant, but based on my work experience I believe I can contribute a bit here. Please allow me a few comments.

I basically agree, proportioning the costs based on item values is probably the most widely used procedure. However, in order to keep it very flexible, I would suggest FA offers three different options as how to calculate the cost proportion:

Based on:
a) item value (as you suggested)
b) item quantity
c) number of invoice lines (e. g.: 4 lines, then every line receives 1/4th of the landed cost)

From my point of view this could be very easily implemented in one and the same function, something like this:

Function CostAllocationPercentagePerInvoiceLine()

If method ="item value" then
return line_value/ total_value

else

If method ="item quantity" then
return line_quantity/ total_quantity

else

If method="invoice_lines" then
return 1/total_number_of_invoice_lines

End If
End If
End If
End Function

You are precisely describing the problem. My thought is this: The process of converting costs to "landed costs", i. e. stock value, should happen as late as possible, because this is when most information is available. Also order quantities might differ from shipped quantities, and costs should be calculated based on the real stock. That's why I would suggest to do this cost allocation just in the very moment when receiving the goods into the warehouse. I could see one of the following scenarios:

a) Simplest solution: Add landed costs as one lump sum
When receiving goods into the warehouse (i. e. receiving the Purchase Order (PO)), FA could offer one single field where the user types in the total amount of all additional costs (same currency as the PO). In this case, these costs need to be calculated externally, this would typically happen in Excel. This would be a great improvement already.
It might happen that for example the shipping company did not yet provide the invoice for this particular invoice. In this case, an estimated value could be used. All the accountant would need to do is to post any difference between estimated and real invoice amount as expense (or income). That´s not "perfect", but much better than not incorporating the costs at all. And of course, that´s perfectly legal (at least in the countries I know, but one always needs to check locally).
Next to the field with the amount there should be a pull down menu that offers the different options as how to distribute the costs (by value, quantity or item line).

b) Keeping record of the different costs
In a more elaborate version FA could offer a separate page when receiving the goods, where all details about the costs being incorporated into stock value could be stored, e. g.:

Supplier, Invoice number, Invoice date, Description (e. g. shipment, or customs), and amount

The impact on stock value would obviously be the same, but this way it would be easier later to figure out what was posted into stock value. This could be extraordinarily helpful for example when a company is being audited, or simply if somebody wants to verify later if all was done properly.

On top of this, I would even recommend allowing to choose the currency for every invoice, and store the used exchange rate in the database.

Again, that's just my personal thoughts on this topic.

Thanks again for considering all this.

Hi Vdonatiello,
I am also neither accountant nor programmer :-)

I hope I can answer your questions:

I think all you need to do is to calculate the total amount of additional costs (shipping costs, customs etc.) and distribute it according to your preferences over the PO.

Example:
Your PO has the following two items:

Item1, 1 piece, $200
Item2, 1 piece, $800
Total PO: $1,000

Your additional costs are $100, which is 10 % of the PO. Then, you just need to increase every single PO line by 10 %:

Item1, 1 piece, $220
Item2, 1 piece, $880
Total PO: $1,100

Now, when you receive the goods into stock, the additional costs become part of your stock value. (Of course, you must not post these additional costs as expenses.)

If I understand correctly, you are asking if it´s correct to evaluate the entire existing inventory with the latest COGS. Example:

ItemA, current stock qty: 1 piece, current stock value (landed cost): $100

Then you purchase another item, let´s say landed cost $150, 1 piece

If you "value the inventory based on the latest COGS", then your new stock value would be:

ItemA, 2 pieces, stock value: 2*$150 (latest COGS) = $300.

I would say this only makes sense if for example you want to sell the inventory based on it´s current market value. For costing purposes, to me it looks wrong because you did not really have a cost of $300.
Even worse: When your latest COGS would be lower than the COGS of the existing value, you would basically depreciate stock value. But this is just my personal opinion.

I totally agree, it´s amazing that such a great piece of software is made available for free.

Two years later...

Has there been any development on this? I am trying to find a solution for several small shops who would love to use FrontAccounting, but only if we can connect a credit card scanner (or find any other simple solution to charge credit cards on the spot). Has there be an implementation with authorize.net?

Thanks for any advice!

Hi Joe,

thanks a lot for your answer.

Prices are often based on a quote from a supplier, so I would use this field to make reference to the quote. It could be named "Your quote" (that´s the term used in Canada), or "Your reference" as a more generic term.

After all, you are using such field already when creating the PO ("Supplier´s reference") http://screencast.com/t/QS3YQ20xZc , but it´s not shown so far on the PO. That´s the one I would use, it makes the screen form more consistent with the PO document.

Please allow me few more comments. The first field in the same line is "Customers reference" (btw, it should be spelled "Customer´s reference"), but when creating a PO, I did not see where to populate this field. Same is true for "Sales Person". I believe the purpose of these fields is for cases when a PO is created 1:1 based on an order from a customer. It makes sense to have such information, but in my case, I would certainly not want to show this information to my supplier, but only use it for internal purposes.

Then, I also don´t see the purpose of "Your VAT no.". Chances are the supplier knows his VAT number already ;-) If this field is required, I would simply add it as a small line to the adress.

Last but not least: the Due Date. What´s the due date of a PO, when for every item there is a "Delivery Date" anyway?

Well, now that I am writing all this it comes to my mind that probably the PO might be using the same template as an invoice. This might appear "efficient", but for daily use I´d say that the documents have very different purposes, so the content has to be very different.

I´m not sure how difficult it would be to implement it, but I believe it would be well received by the FA community if it were possible to

a) Modify the field names and
b) choose like from a pull-down menu the content for the fields.

But I also want to add that I do like the clean layout you guys are using, I´ve been working with programs before where it was impossible to use any document "out of the box".

Thanks again for your consideration.

MacPhotoBiker

Hi psonon,

sorry for my late answer, I guess I forgot to "subscribe to this topic".

You are right, landed cost is much more than a posting concept. After all, the impact on profit (over time) is the same, no matter if you put the additional costs into the stock value, or if you just expense them. After all, FA claims to be an ERP system, and landed costing is such a basic concept that I was actually hoping this could be done here. And then, also accountants should be interested in this concept, since this is a major tool allowing to decide if the mentioned costs are expensed right away, or distributed over sales.

In the past, one "workaround" for another ERP system I found was this: I connected Excel via ODBC to the line items for a particular purchase order, calculated the additional costs on a second sheet, then included them in the different item prices, distributing the additional costs to each line according to the line´s share of the total value.

Am I correct that you did not find a real solution for this topic? How are you dealing now with it?

Hi joe,

thanks for your answer. My apologies, but I don´t quite understand what you mean. Is the field "our order" not populated at all? Or from where does it get it´s content? To me it doesn´t look like the same since PO number shows "3" while "our order" is empty.

Is it possible to edit the template of this form myself, and define the data sources myself?

Thanks a lot!

MacPhotoBiker

Thank you Janusz, much appreciated.