TRUECOS - True-Up Cost of Sales

What is

The purpose is to allow a company to correct and/or modify the COS that was calculated/secured during the Sales Invoicing process and so provide better performance statistics in the CUST_PL reporting. At the time of Sales Invoicing, the estimates could have been dramatically incorrect and the subsequent actualisation processes have modified those estimates significantly.

TRUECOS has two functions which may work together or independently

The adjustments may be applied to invoiced sales which are allocated back to back or to stock. The purpose of the process is to make the margin accurate which is necessary when agreements exist with a supplier to split profit above a certain level on a contract. Late costs may affect the original margin.

1. True Up COGS

The purpose of this mode is to adjust the Cost of Goods Sold. The required value per MT is entered against invoiced sales and if this differs from the existing COGS (Purchase price + COGS estimate on purchase or sale) a new COGS estimate is added to the sale so that the purchase price + COGS estimate matches the required COGS. The process may be repeated. The cost of sales and margin values stored at sale level will be adjusted. The COGS Cost Code is maintained in PHYSCODES/Cost Types/Control Costs

2. Desired Margin

The purpose of this mode is to adjust the Margin. The required value per MT is entered against invoiced sales and if this differs from the existing Margin a new Margin estimate is added to the sale so that the recalculated Margin matches the entry. The new estimate is actualised and creates a posting between the Expense Code P&L Account and the Expense Code Accrual Account. The cost of sales and margin values stored at sale level will be adjusted. The Margin Cost Code is maintained in PHYSCODES/Cost Types/Control Costs. The process may be repeated.