Invoice price adjustment

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.

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 :

• FARCLOPER (Control of invoices receivable)
• GAUPNH (Credits to receive journal)
• GAUPTH (Invoice receivable document)
• PIBLKR (Restriction to inv line source)
• PIHACCDAT (Allow account date changes)
• PIHCALTAX (Tax calculation)
• PIHIMPCTL (Invoicing elements on import)
• PIHQTYAQR (Billable quantity)
• PIHQTYRET (Returned quantity invoicing)

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 determine how 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 no longer weighed. Since invoicing elements (carriage charges, insurance, etc.) are not available at the time of the order, they can be included upon order by considering that they will be entered upon invoicing in the form of an additional invoice (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.
  When a credit memo is associated with an invoice (including landed costs), the part corresponding to these additional costs is never reversed. The stock adjustment linked to the credit memo only reverses those differences concerning quantities or prices. For further details and examples on how this operates, refer to the documentation on: Basic principles for the valuation of the stocks.
  
  The setup 'with landed costs' is not compliant with an Anglo-Saxon accounting. The Goods Received Not Invoiced (RNI) account will not be balanced. This is a limitation of the system.

Example:

Let us assume 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.

Let us assume 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 performed. We can then consider that we estimate that 10% of the miscellaneous costs that cannot otherwise be entered are included in this cost.