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Purchase Manager - Parameters - Update - Update COGS Adjustment

The Update COGS Adjustment Update Parameter settings define how the COGS Adjustment field on the Inventory Database record is applied. This field's value represents the difference in the cost of items that were sold compared to what the actual cost is. This difference is the result of the QOH of an item being less than zero (caused by the item being sold before it was received) and the resultant cost changes.

To display the Apply COGS Adjustment Parameters screen, select the COGS Adj Settings button. The Update COGS Adjustment Parameter settings are:

Apply As New Sales Invoices are made:
This is the default setting and adds the COGS Adjustment amount to the cost of the line item on new Sales Invoices.

Apply full amount (otherwise by QOH):
This setting determines if the entire amount will be applied on a single sales invoice or if it is applied across all items currently on hand. Applying the full amount places the correction closer in time to the invoice that created the problem, but can result in the line item cost being very different if the quantities are large.

As Purchase Invoice is saved:
This setting applies the amount to either Previous Sales Invoices and/or by creating new $0.00 Sales Invoices. Note: Both of these parameters may be enabled.

Previous Sales Invoices:
When enabled, this setting prompts for a Date Range to be entered. This Date Range field typically contains a relative date string (e.g., "-1D" to go back 1 day). Keystroke uses the Date Range to determine how far back to search for Sales Invoices that should have line item costs corrected. Sales Invoices dated before the current Transaction Lock Date are excluded. If multiple Sales Invoices are located, Keystroke begins making corrections with the oldest invoice that would have caused the item QOH to become negative and continues making adjustments moving forward in time until the COGS Adjustment is used up for affected line items. This function changes transactional history and any reports that include affected line item costs should be re-run for the Date Range period of time.

Create new $0.00 Sales Invoice:
Wen enabled, this setting prompts for a Customer Number to be entered. As the function runs, it creates a new Sales Invoice for the specified Customer using the same date/time as the Purchase Invoice. The Sales Invoice total is $0.00 and it contains the line items that had a COGS Adjustment on the Purchase Invoice being saved. Each item on the new Sales Invoice is listed twice, once with a Qty= 1 and once with a Qty= -1. All prices are $0.00. The line items with the Qty= 1 have their cost set to the COGS Adjustment amount for that inventory item. The line items with a Qty= -1 have a cost of $0.00. The results ia a Sales Invoice that doesn't do anything other than provide a sales cost adjustment for the affected line items.

Note: These parameter settings are not mutually exclusive. More than one may be enabled. The order in which they are applied is:
- Previous Sales Invoices
- Create new $0.00 Sales Invoice
- As New Sales Invoices are made

For example:
- Inventory Item: QOH=0, AvgCost=$1.00
- Sell Qty 2: COGS on Invoice=$2.00, Item QOH now = -2.
- Then receive: QtyRecvd=8, Cost=$1.21 each, Item QOH now 6, AvgCost=$1.21, and the COGS Adjustment=$0.42 (2 sold, $0.21 difference each).

The Parameter settings then determine what happens to the COGS Adjustment. The default is to apply the COGS Adjustment amount as new sales invoices are created. The amount will be added to the cost of those items that have a COGS amount remaining based on the current QOH.

For example (from the sample above):
Using the default parameter settings of As New Sales Invoices are made only:
Since the COGS Adjustment is $0.42 with 6 QOH, the $0.42 is divided by the 6 QOH resulting in $0.07 each. The cost of each of those 6 items includes the additional $0.07 when each is sold. The result is the $0.42 missing when the first 2 items were sold is made up when the remaining 6 items are sold.

To set this parameter:
- Select Parameters from the Purchase Manager Transaction Menu.
- Select Update.
- Select Update COGS Adjustment on the Update Parameters screen.
- Use the mouse or the [Space Bar] to turn the parameter ON or OFF.
- Select the COGS Adj Settings button.
- Enabled the desired COGS Adjustment Update Parameter settings on the Apply COGS Adjustment Parameters screen.
- Select [OK] or press [F10] to save.


Purchase Manager - Parameters - Update

Purchase Manager - Parameters

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