Expense Allocation

In cieTrade.net, an Expense Allocation allows users to capitalize expenses, such as handling charges, storage fees, or late freight bills, into the value of existing inventory items after they have been received. This process will allow an expense or expenses to be added to one or more inventory items and distributed evenly among the items selected. The expenses are then posted as usual from the AP Ledger and the costs are added into the value of the inventory items. It is important to note that an Expense Allocation cannot be performed on inventory items that have already been sold.

To create a new  Expense Allocation use the Quick Create button on the Allocations module in the Inventory tab or navigate to Inventory > Allocations and click the New Expense Allocation button provided in the top right corner.

Start by completing the reference fields along the top of the Expense Allocation:

The  Dept and Trade Type fields are optional and are used to track financial information for distinct divisions of a company and/or distinct financial centers related to the expenses created by the allocation process.

Use the Warehouse drop-down to indicate the location of the items for which the Expense Allocation is being created and to pre-fill the Warehouse in the filters of the item lookup. {Note: The Expense Allocation can be used to move inventory items from one Warehouse to another by setting this field to the destination warehouse.}

The Posted Date populates automatically with today's date when the Expense Allocation is Posted (discussed later). This is a 'financial' date that represents when the expenses on the allocation impact inventory values.

The  Status drop-down is used to indicate whether the Expense Allocation is in OPEN or POSTED status. An Expense Allocation in Open status is still in progress and will not impact the value of any selected inventory items.

The  Trans-Date, or transaction date, is simply a reference date for the day that the expense allocation was created. It is NOT a financial date. The Posting Date (above) is the date that the expenses impact inventory value(s).

If needed, a Manifest/BL or other reference-type numbers can be recorded for purposes of tracking the event represented by the expense allocation.

A  Description can be used to describe the event, circumstances, or process related to the Expense Allocation.

The remainder of the Expense Allocation is broken down into two parts:

  • An Expenses section allows for the recording of an expense or expenses to be allocated among the inventory items selected; and
  • The Source Stock section names the specific inventory items that the expense(s) recorded above apply to and will be distributed among.

Expenses

To add expenses to the Expense Allocation, click the Add Expense button provided in the Expenses section. 

Use the drop-down provided to select the  Vendor invoicing for the expense. If the selected Vendor is a Freight Carrier, the checkbox will be populated.

Enter the Price and Price Unit of Measure (e.g., FLAT, per LBS) from your Vendor's invoice. If a per weight unit of measure is selected, the Price entered will be calculated off of the total quantity of your Source Stock (discussed below).

Once a Vendor is selected, the Vendor's default Expense Account will populate. If necessary, select the appropriate expense account based on the expense being entered.

The Description field can be used to record a short explanation for the expense, such as 'Freight' or 'Handling Charge', which may appear on some documentation.

Users can also use the Expense Field to enter commission expenses as a percentage of either the buy/sell total or the gross profit of the total load.

Source Stock

Source Stock must be added to the Expense Allocation and can be selected in one of two ways:

  1. Specific inventory lots can be selected using the Select Inventory option; or
  2. The contents of an entire warehouse can be selected using the Select Warehouse option.

When Select Inventory is selected, a new page will open, allowing source stock to be selected. The Pick Inventory page provides search options for the application of source stock to the Expense Allocation. 

A user can search by:

  • Item No.
  • Warehouse
  • Product/Grade
  • Class
  • Received Date
  • Supplier
  • PO-No

Any combination of filters can be used to locate the needed inventory items. Use the Go button to search using the selected filters.

Once search results have been returned, use the check boxes to the left of the inventory item(s) to pick the source stock and then click the Apply button in the top right corner of the page to add the selected item(s) to the Expense Allocation.

The  Select Warehouse option can be used to capitalize expenses, such as storage and handling costs, into the value of all inventory items located in a specific warehouse. An example of where this might be useful would be if a Warehouse that you are using charges you monthly storage/handling fees. To use this feature, the Warehouse drop-down menu located at the top of the Expense Allocation form must be set to the desired warehouse. Upon clicking Select Warehouse, cieTrade.net will pull the contents of the warehouse selected, as of today's date. The total weight and the total number of items will be displayed.

Once the information on the Expense Allocation has been entered completely, the status should be updated to Posted in order to update the value of the inventory item(s) and accrue the necessary payables for your Vendors. These payables will be created directly in the AP Ledger and will be available for posting as soon as the Expense Allocation has been Posted.

If necessary, a Posted Expense Allocation can be reversed, given the following: it must have been posted within the current open period, and the associated payables must not have been paid. To undo an allocation, simply click the  Edit Allocation button in the top right corner and then change the status from POSTED to OPEN. Saving a previously Posted Expense Allocation in OPEN status will remove the associated Expenses from the AP Ledger and restore the previous value of the item(s) in inventory. 

If you have additional questions, please contact the Support Team via email to  support@cietrade.net.

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