General parameters >  Chapter Purchase >  Parameter PIHCPR (Invoice price adjustment)  

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Landed costs are used to quantify the routing costs of the goods ordered from a supplier and to allocate them to the products upon order/receipt in order to forecast as accurately as possible the receipt values (purchase cost and stock cost).

This parameter is used to specify whether landed costs should also be taken into account in supplier invoices.

The possible values for this parameter are as follows:

  • Without landed costs: the landed costs are included in the purchase cost and stock cost of both the order and the receipt.
    When saving the invoice, the values calculated upon receipt are overwritten. The receipt values are then calculated based on additional invoices and stock adjustment.
  • With landed costs: the landed costs are included in the value of the receipt movement and are also taken into account in the calculation of the receipt values of the invoice. These are thus theoretical values, as no reconciliation with additional invoices is performed.
     This setup is not compliant with an Anglo-Saxon accounting. The Goods Received Not Invoiced (RNI) account will never be balanced. This is a limitation of the system.

Level of localization / Global variable

This parameter is defined at the level Company. It belongs to Chapter ACH (Purchase) and the Group INV (Invoicing rules), The following parameters are also associated with this chapter and group :

The global variable GPIHCPR is associated with it.

Functions concerned

The following functions are associated with this parameter :

  Purchasing > Invoices > Invoices

Comments

This parameter is used to define the spirit in which landed costs are used in purchase management :

  • If its value is set to Without landed costs, it is considered that the landed costs (method based on the landed cost coefficient or the cost structure) are a way to estimate, upon receipt of the order, a receipt value with respect to the value that will be given at the time of invoicing. Conversely, upon invoice entry, the calculated amounts are not weighted any longer. Since invoicing elements (carriage charges, insurance, etc.) are not available at the time of order creation, this makes it possible to include them in the order by considering that they will have been entered in the invoice in the form of additional invoices (and thus the invoice value will be close to the final value).
  • If its value is set to With landed costs, it can be considered that the landed costs are a way to take into account elements that remain unknown at the time of order or invoice entry: for instance administrative costs or costs impossible to redistribute. These elements will not be entered in the form of additional invoices but it will be possible to enter them in the form of miscellaneous invoices. It is therefore logical to find them both in the orders and the invoices.
     This setup is not compliant with an Anglo-Saxon accounting. The Goods Received Not Invoiced (RNI) account will never be balanced. This is a limitation of the system.

Example :

Supposing that the net price of a product is equal to € 100 upon receipt, the "Landed cost coefficient" is 1.1 and the "Fixed amount per unit" is 0. The goods will then be received with a unit price of € 110.

Suppose that the invoice arrives and the unit price obtained is € 105:

  • If the parameter value is set to Without landed costs, the final receipt price will be € 105. Therefore an adjustment of – € 5 is performed. We can consider that the initial € 10 resulting from the application of landed costs were an approximation of the invoice footer charges that have been transferred to the line.
  • If the value is set to With landed costs, the final receipt price will be € 115.50 (i.e. 105 multiplied by 1.1). Therefore an adjustment of € 10.5 is made. We can therefore consider we estimate 10% of the miscellaneous costs that cannot otherwise be entered are included in this cost.