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  13. (Accounting) Invoice order structure...

(Accounting) Invoice order structure items

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The following describes the accounting transactions the system creates when you invoice items included in an order structure, with VAT. In this example one of the components included in the order structure is backlogged and delivered later. The example describes the transactions created when the first invoice is created and the transactions created when the back order is invoiced.

Prerequisites

Invoiced qty of parent item 1
Quantity of each included component 2
Sales price of parent item 100.00 SEK
VAT item 25%
Backlogged in the first delivery Component 2
The Sales price calculation field in the Order structure type table is set to 1, which means that the parent sales price is used and the component sales prices are set to 0.00.

Flowchart

Created transactions when the first invoice is created

Transaction type Description Amount
Debit		 Amount
Credit		 Calculation/Result/Additional info
The 820 and 823 transactions are calculated as each component’s part of the total order structure value, based on the cost price on each component, i.e. a factor is calculated first.
820 Sales value Gross VAT   85.71 This is the Sales value Gross VAT for the goods delivered.

(Factor for cost value, parent item * Sales price of parent item) + (Factor for cost value, component 1 * Sales price of parent item)

(0.7142 * 100.00) + (0.1429 * 100.00) = 85.71

where,

Total cost value for the order structure: (Cost price of the parent item * quantity) + (Cost price of component 1 * Quantity) * (Cost price of component 2 * Quantity)

Factor for cost value, parent item: Cost value of parent item/Total cost value for the order structure

Factor for cost value, component 1: Cost value of component 1/Total cost value for the order structure

Factor for cost value, component 2: Cost value of component 2/Total cost value for the order structure

In this example the figures are:
Total cost value for the order structure: (50.00 * 1) + (5.00 * 2) + (5.00 * 2) = 70.00
Factor for cost value, parent item: 50.00 / 70.00 = 0.7142 (rounded)
Factor for cost value, component 1: (5.00 * 2)/70.00 = 0.1429 (rounded)
Sales value Gross VAT: (0.7142 * 100.00) + (0.1429 * 100.00) = 85.71
823 Sales value invoiced not delivered VAT   14.29 This is the Sales value Gross of the component not delivered. The 823 transaction is a temporary account that is reversed when the backlogged line is later delivered.

Factor for cost value, component 2 * Sales price of parent item

0.1429 * 100.00 = 14.29

where,

Total cost value for the order structure: (Cost price of the parent item * quantity) + (Cost price of component 1 * Quantity) * (Cost price of component 2 * Quantity)

Factor for cost value, parent item: Cost value of parent item/Total cost value for the order structure

Factor for cost value, component 1: Cost value of component 1/Total cost value for the order structure

Factor for cost value, component 2: Cost value of component 2/Total cost value for the order structure

In this example the figures are:
Total cost value for the order structure: (50.00 * 1) + (5.00 * 2) + (5.00 * 2) = 70.00
Factor for cost value, parent item: 50.00 / 70.00 = 0.7142 (rounded)
Factor for cost value, component 1: (5.00 * 2)/70.00 = 0.1429 (rounded)
Sales value invoiced not delivered VAT: 0.1429 * 100.00 = 14.29
960 VAT output of order lines   21.43
Sales value Gross VAT * VAT percentage of VAT handling code

85.71 * 0.25 = 21.43

This is the VAT amount for the 820 transaction.
963 VAT output invoiced not delivered   3.57
Sales value invoiced not delivered * VAT percentage of VAT handling code

14.29 * 0.25 = 3.57

This is the VAT amount for the 823 transaction. The 963 transaction is a temporary account that is reversed when the backlogged line is later delivered.
The next four transactions are the cost of goods sold and the stock value for the parent item and the component delivered.
800 Cost of goods sold 50.00  
Cost price * Quantity

(parent) 50.00 * 1 = 50.00

This is the VAT amount of the administration fee.
901 Stock value   50.00
Cost price * Quantity

50.00 * 1 = 50.00

This stock value corresponds to the Cost for goods sold for the parent.
800 Cost of goods sold 10.00  
Cost price * Quantity

(component) 5.00 * 2 = 10.00
901 Stock value   10.00
Cost price * Quantity

5.00 * 2 = 10.00

This stock value corresponds to the Cost for goods sold for the component.
802 Coin adjustment   5.00
Coin adjustment in invoice currency * Exchange rate

In this example the figures are:

Net sales value in SEK: 100.00
VAT output of order lines: 25.00
Total in SEK: 100.00 + 25.00 = 125.00
Invoice total in SEK: 130.00
Coin adjustment: 125.00 – 130.00 = -5.00

In the Currency table for the SEK currency, the Adjust inv amount field is 10.00, which means that invoice amounts should always be rounded off to the nearest tenth Swedish krona.
A/R To be accounted on Account Receivable 130.00    

Created transactions when the backlogged order line (component 2) is invoiced

Transaction type Description Amount
Debit		 Amount
Credit		 Calculation/Result/Additional info
The first two transactions reverse the amounts accounted on 823 and 963 when the first invoice was sent.
823 Sales value invoiced not delivered VAT 14.29    
963 VAT output invoiced not delivered 3.57    
The next two transactions book the amounts on the normal Sales value Gross VAT account (820) and VAT output of order lines (960).
820 Sales value Gross VAT   14.29  
960 VAT output of order lines   3.57  
The last two transactions are the cost of goods sold and the stock value for the parent item and the component delivered. Those costs were not booked when the first invoice was sent because the component was backlogged.
800 Cost of goods sold 10.00  
Cost price * Quantity

(component) 5.00 * 2 = 10.00
901 Stock value   10.00
Cost price * Quantity

5.00 * 2 = 10.00
A/R To be accounted on Account Receivable 0.00    

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