New option prevents update of tied order cost for specials

During sales order entry when you tie an order to a PO or transfer for a product that was obtained from the vendor as a special product, the received cost is normally carried back to the sales order line. The Cost Override flag on the line is set to Yes. This cost is used during receiving to update General Ledger Inventory cost. During invoice processing, the new cost on the sales order line is used again to update GL Inventory and balance this account. At issue is the impact on commissions paid to salesreps based on margins. Margins for special products based on receiving cost may be overstated, thus resulting in inflated commissions.

This enhancement adds an SA Administrator option to block the update of the sales order line special product cost during Purchase Receipt of Inventory Entry or Transfer Receipt of Inventory Entry. Instead, the PO or WT cost is rolled to the internal Received GL Cost field on the line. The Product Cost on the sales order line is the cost from the inventory record and the Cost Override flag is No. This ensures the cost on the line only updates the cost used to calculate commissions, as defined in SA Administrator Options-Products-Costs.

To ensure that inventory is balanced between PO or transfer receiving and invoice processing, the Inventory control account is still updated with the received cost.

This option applies to lines marked as Special on sales orders and tied to purchase orders or transfers, including kit components. The option does not apply to special line items or components tied to KP or VA work orders.

Note: If you selected Tied Special or Both for the Use Current Sales Mgr Cost in SA Administrator Options-Products-Costs, the SM Cost is updated during Sales Entry Invoice Processing Report.

Feature activation

To activate this feature, select Do Not Update Tied Order Cost for Specials in PO/WT in SA Administrator Options-Products-Costs.