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Re: Shipping costs for incoming goods
- Subject: Re: Shipping costs for incoming goods
- From: "Matt Jackson" <..hidden..>
- Date: Wed, 14 Mar 2007 19:24:03 -0400
In tentative response to myself, I found this item from a "Certified Quickbooks Pro Expert Grand Poobah Guaranteed Effective Provider" or something like that:
"You can charge the shipping charges to an expense account and then
do an Inventory Adjustment (value only) to add the shipping charges to
inventory and credit (zero out) the expense account charged when you
paid for the shipping."
I suspected this was the case, but this is such a common item to deal with for retailers who pay FOB shipping costs. I don't understand why even Quickbooks can't do some function that will do the following (as one example of one method of adding FOB shipping into COGS):
1. Have a shipping cost field in a Vendor Invoice
2. Take the entered shipping cost and (again as an example of only one of many methods) run "# of items purchased/shipping cost". So, 100 items purchased with a freight bill of $10 would = $0.10 per item, shipping cost. Now the COGS on that item who's unit price was, say, $1 is now $1+$0.10. This way we can track item price and shipping price separately, but the COGS is effectively $1.10.
3. Now leave that record of $0.10 permanently attached to that item, so that when it comes up as the next in line to be expensed under FIFO, the $0.10 goes along with it.
Mathematically this seems so simple...is there more to this than I am seeing?
On 3/14/07, Matt Jackson <..hidden..> wrote:
If I am entering a shipping cost for items I've purchased from a Vendor, do I need to add shipping cost in the "Add Labor/Overhead" section of Goods & Services?
What I am really curious about is this: when we run a FIFO report to determine COGS for the prior year, how does the program roll the shipping costs into the cost of the goods?
For example, if I order 18 individual items, all at different price points, but the shipping cost for all was $18, does the program assign a shipping cost of goods sold at $1, and then include that on the report?
How does this balance out in practice?