ERPNext.com Frappe Cloud Support Partners Foundation Frappe School

Landed Cost Voucher GL Posting Problems

Hello,
I’ve been testing Landed Cost Vouchers and found problems in the way dollars are posted to the GL. In some cases liabilities are overstated, in others inventory is understated and I have not found a way to get around these problems so far.

I tested three scenarios, all for a $100 item, with a $10 shipping charge and a $15 third party charge. The $10 and $15 charges were posted to the “expenses included in valuation” account.

The $10 shipping charge was entered at different times during the three tests.

  1. added during purchase order entry
  2. added during purchase receipt entry
  3. added during purchase invoice entry

In all scenarios, the $15 third party charge was entered with a Landed Cost Voucher after purchase invoice entry. Below is the list of transactions entered for all three tests.

purchase order
purchase receipt
purchase invoice
landed cost voucher
shippers purchase invoice
sales invoice
delivery note

Tests 1 & 3 both overstated liabilities. Everything looked fine after the purchase invoice was submitted, but the LCV changed the $10 credit that had been posted to the “expenses included in valuation” account to the $15 LCV charge and a new credit for $10 was posted to the “inventory received not billed” account. Additionally, AP trade still showed a $110 credit, so your potential liability is now $120, when it should be $110.

When the LCV is submitted, if a new credit of $15 was posted to the “expenses included in valuation” account rather than “moving” the $10 credit to the “inventory received not billed” account, these postings would be fine.

Test 2 understated inventory. The purchase receipt looked fine, but the $10 charge added to the purchase invoice did not hit the inventory account. It showed a debit of $100, but should have been $110. The LCV posted fine and debited the $15 to inventory, so it then showed a debit of $115, but should have been $125. The delivery note credited inventory the full $125, so inventory is now short $10.

If the purchase invoice posted a $10 credit, then a $10 debit to the “expenses included in valuation” account, then posted the $10 credit the inventory account, these postings would be fine.

Is there a correct way of adding landed costs to receipts that does not result in these problems?

I apologize for the long post.

2 Likes

Can you share the screenshots one by one? Mainly the purchase reciept, lcv &, purchase invoice.

Sure.

Below are the accounts affected after completing the list of transactions in my first post and adding the $10 charge to the purchase receipt. The results are identical when adding the $10 charge to the PO. In this case the value of inventory is correct - $125, but the two highlighted balances don’t have offsets, so it looks like those charges will accumulate over time in those accounts.

Also, in both cases, the $15 credit on the “expenses included in valuation” account prior to submitting the LCV was $10. The LCV changed that amount from $10 to $15. I would have rather seen the original $10 credit left alone and an additional credit of $15 created.

Below are the affected accounts after processing the same transactions, but adding the $10 charge to the purchase invoice. The offsetting debit is showing on “expenses included in valuation” and was added to “accounts payable”, but the inventory value was not adjusted, it should be $125. I don’t know of another transaction that would move those dollars to inventory. It seems clear the PI is not able to post additional charge dollars to inventory like the PR does.

Also, I have this same print out from yesterday that shows the credit on the inventory account from the delivery note as $125, not $115. I’m glad they match now, but I’m not sure why they didn’t yesterday or how it changed. Like I said, I have a physical print from yesterday showing that.

Thanks for the input and let me know if you would like to see anything else.

Following up on this. Does anyone know if there is a way to process LCV’s without creating accumulating entries in the “inventory received not billed” or “expenses included in valuation” accounts that are outlined in my previous posts? Thanks

Sorry. I could not understand your entries. I will explain how I am processing the LCV. For example: I have a purchase receipt of 1000$. There is an additional cost of 100$ for customs and 50$ for transportation. Now I will create a LCV and select the expense accounts, customs duty and transportation expense and will add the expense amount. Expense accounts will be credited against the inventory account and my inventory value will be updated by 1150$. I will book these expenses through a purchase invoice or a journal entry where I will debit these above expense accounts so that my expense will be showing as zero. I will create the transport expense as service item and will link with it transport expense account so that it won’t effect the inventory received not billed account when I am creating a purchase invoice. When I am selling these items, my cost of goods sold be debited against the inventory account. Hope this is clear.

1 Like

I ran across this problem again and would like to understand why an LCV moves balances from “expenses included in valuation” to “inventory received not billed”. They don’t appear to be moved using additional transactions, they just disapear from one account and appear on the other. Please see screenshots below.

After submitting a receipt, these are the gl transactions. You can see $10 is posted to “expenses included in valuation” using a taxes and charges template:
image

These are the transactions from the invoice.
image

I then created an LCV for an additional $20 charge. See that the $10 charge was moved to “inventory received not billed”.
image

Is this expected behavior? Why are these balances moved? Thanks.

1 Like

Has anyone else seen this behavior or understand why balances are moved from one account to another after submitting an LCV? Thanks

Looking for input from anyone who has noticed amounts being moved from one account to another without a documented transaction. In this case it occurred after posting an LCV. Maybe there is a good reason, maybe my transactions are out of sequence. Any input is appreciated.