Cost of Sales

Overview

This report allows you to analyse the profitability of transactions at both the header and item levels, and it can operate on multiple tiers. For example, suppose you have a sales order transaction that is associated with multiple work orders. In that case, you can use this report to evaluate the profitability of each Work Order individually, as well as the overall profitability of the Sales Order.

The following Costs can be measured:

• Purchases

• Goods Issued

• Goods Returned 

• Expenses - linked to Transactions in the Ledger - see below.

• Services- Internal Services  (Labour) from timekeeping

Filters

• Date - Select from Transaction Date or Invoiced Date 

• Transaction - select from a list of transactions in your Costing Setup.

• Status - Transaction Status

• Transaction No - Select a Transaction and enter a No. 

Transactions View

This view displays a cost summary at a transaction level. All the Costs linked directly to the transactions or to cascading transactions are displayed. When Invoiced Date is selected, the Actual Invoiced and Variance between Order and Invoiced are displayed. Right-click on a transaction to view the detail of the Costs displayed in the gridview. Actual Costs that are linked at a Header or an Item level will be displayed in this view.

Fields

Costs

• Stock Issued

• Stock Returned

• Purchases

• Services

• Expenses

Summary

• Total - the Total on the selected Transaction - eg. Sales Order

• Invoiced - the total Invoiced amount less the total Credited amount linked to the selected Transaction. This field is only displayed if the Invoice Date filter is set. 

• Variance - the difference between the Total and Invoiced fields, a useful indicator to make sure that all your orders are invoiced correctly. This field is only displayed if the Invoice Date filter is set.

• Cost 

• Profit

• GP% - Profit / Invoiced

• MU% - Profit / Cost

Items View

This view displays an Estimated vs Actual Cost Summary at an Item Level. If the transaction uses Estimates, the Estimate items will be displayed otherwise, the Transaction Items will be displayed. Right-click on a transaction to view the detail of the Costs displayed in the gridview. Actual Costs that are not linked to Items will not be displayed in this view.

Fields

Qty

• Estimated - Qty for Materials and  Inventory and Hr/s for Services

• Actual

• Variance

Costs

• Stock Issued

• Stock Returned

• Purchases

• Services

Summary

• Estimated - Costs

• Actual

• Variance - Estimated - Actual Cost

• Var %

Expenses

In the Ledger, it is possible to assign expenses to specific projects (transactions) using the Allocate Expense menu item, accessed by right-clicking on the expense item. This allocation can only be done using the local currency. You can allocate the expense to one or multiple transactions that are connected to expenses in the Costing Rules Setup, as described below. The following columns can be added to the Ledger Items View to provide an indication of the allocated Expenses:

• Expense Allocation - Lists the transactions to which the expense was allocated.

• Allocated Total - The total amount that was allocated.

Note: These fields are highlighted in red when the Allocation does not match the item total.

How to Allocate Expenses in the Ledger

• Right-click on the expense item that you want to allocate in the Ledger.

• Select Allocate Expense from the popup menu.

• Select a transaction to which the expense is allocated and click Add Allocation. You can select any transaction linked in the Costing Rules Setup. Note that cancelled transactions are excluded.

• By default, the allocated amount will be set to the outstanding amount of the expense item. However, you can manually change the amount if needed.

• Repeat the process to allocate an expense to multiple transactions.

Setting up

General Settings > Accounting > Setup Costing Rules is used to set up the module by linking transactions as well as the source of the costs linked to the transactions. Note the Invoiced Date option is only available when an Invoicing module is linked to a Transaction.

General Settings > Accounting - Filter - Accounts that update Cost of Sales - list the Cost of Sales Account for the Detailed Ledger View.