Purchase order addons

Addons are charges that are over and above the total price of the merchandise, and that are added to the order. There are two types of addons that can be applied on a purchase order: capitalized and expensed.

Capitalized addons

Capitalized addons are acquisition costs, such as freight or handling charges, that are added to the GL product cost. These addons are reflected in the cost of goods sold and gross margin. The cost of the addon is allocated to the items received based upon the allocation method, such as Amount or Unit. The cost is absorbed into inventory upon receipt of the purchase order.

Note: Although addons can be negative, you cannot enter capitalized addons on a purchase order in Purchase Order Entry or Purchase Entry Receipt of Inventory for an amount that exceeds the received amount. For example, if the total received amount is $100.00, and you specify an addon for $101.00, then during final update an error is displayed: Capitalized Addons Greater Than Received for PO#. You cannot complete the update. This error does not apply to percentages.

Expensed addons

Expensed addons are memo entries that are used to notify accounts payable of additional non-product costs that are expected on the invoice. Product cost and journal postings are not recorded for expensed addons when the purchase order is received. If you are using the Overseas Trade module, only capitalized addons are allowed.

Specifying addons

You can specify addons on a specific purchase order during Purchase Order Entry or Purchase Entry Receipt of Inventory.

Addons can be negative. For example, you can use an addon to reverse charges that were part of the original purchase on a return merchandise (RM) order.

You can specify expensed addons on any type of purchase order. However, because you cannot specify capitalized addons on an RM type purchase order, any capitalized addons defined in Vendor Setup are not displayed or calculated.

Addons assigned to a vendor

Set up purchase order addons in SA Table Code Value Setup. Then, you can designate an addon for a specific vendor in Vendor Setup. You can assign up to six addons to a vendor; two expensed and four capitalized.. Of these, four addons are displayed or calculated in Purchase Order Entry and Purchase Demand Center Entry. If more than four addons exist in Vendor Setup, capitalized addons are applied to the purchase order first.

For example, if you have set up three capitalized, and two expensed, addons for a vendor, the three capitalized addons and the first expensed addon are displayed or calculated when your create a purchase order. You can manually apply addon charges to a purchase order.