Purpose
This routine is used to enter variance take-up values and General Ledger posting to be used for the automatic take-up of Purchase Price Variances on finalised Shipments. Purchase price variances that are below a certain value can be easily removed from the purchase price/ shipment variance reporting facility to allow purchasing/ accounts personnel to concentrate on reconciling those variances with a greater value. This is how the Purchase Accruals Ledger is kept “clean” and any variances that occur in the costing of purchase shipments are reconciled and written-down.
Data Input
Step 1 – Shipment Variance Take Up Details
Value for Variance Take-up
Enter the local currency value to two decimal places of an acceptable shipment variance that can be taken up and reconciled automatically using the Automatic Take-up routine. The system will use this figure as the threshold up to which shipments with a variance can be automatically reconciled and written-down.
%Value For Variance Take-up
Enter the percentage value to two decimal places of an acceptable shipment variance. The system will use this percentage to calculate a “value” figure to be used as the threshold up to which shipments with a variance can be automatically reconciled and written-down. Note that shipments must pass both the “value” threshold and the “percentage of value” threshold tests in order to be selected for automatic take-up.
Account Code For Variance
Enter the account code to be used for General Ledger posting of any variance take-up. This GL account (along with branch and division) is used to reconcile and write-off any variance between the shipped received value and the invoice value of shipments in the Purchasing system. Note – the routine for variance take-up automatically posts to the Purchase Accruals ledger where the variance is held, but needs to know the other side of the entry here as to where to take-up the expense for shipment variances. The GL code for these shipment variance postings is often found in the “Cost of Goods Sold” section of the Profit and Loss but it can also be placed in the Expenses section or anywhere else that the user determines based on the account code entered here.
Branch Code
Select the branch code to be used with the GL variance take-up account posting above.
Division Code
Select the division code to be used with the GL variance take-up account posting above.
Use receipt location Branch Code
Select whether you wish to use the receipt location branch code instead of the branch selected above. This will cause the GL posting account to be branch specific based on the Receipt Stock Location held against each purchasing shipment that has a variance taken up.
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