Purchase allowance – Uniconta

Purchase allowances are used to allocate costs, such as freight and customs, to one or more items based on weight, purchase price or similar. This moves the cost to inventory and increases the cost of the item on the goods receipt. ATTENTION! Purchase account on product group must be filled in for purchase surcharges to be posted. Note! The purchase add-on functionality is only used if you want to move the cost to cost of goods sold instead of direct cost on a freight/customs account.

Setting up

Purchase allowance is turned on under Company/Maintenance/Turn features on/off
Purchase allowance types are created under Accounts payable/Maintenance/Purchase allowance types. Read more about this below.
Surcharge types are attached to purchase orders and/or on posted purchase invoices. Read more about this below.
Calculate the cost of driving if necessary. Read more about this below.

Create purchase add-on types

Create Purchase Allowance types first by going to Accounts payable/Maintenance/Purchase allowance types. Click F2 or select the Add record button to create a new purchase allowance type. See the description of the fields below. Once the purchase allowance types have been created, you must then link them to purchase orders and/or already posted purchase invoices. Read more about this below.

Description of fields under purchase allowance types

Field name	Field Description
Code:	A code that can identify the appendix.
Name:	The name of the created supplement.
Account:	Select which account to post the amount to.
Account name:	Automatically populated from the selected account.
Percentage/Amount:	Select whether the allowance should be distributed as a percentage or a fixed amount.
Amount:	The amount either as a percentage or the selected currency.
Currency code:	If the currency is different from the company currency, select a currency code here. If no currency code is selected, the company currency selected in the Company details is used.
Post to vendor:	If you want the purchase allowance to be posted to the vendor, check this box.

Purchasing allowance tracking

It is possible to look at the entries for a purchase to see if there is a purchase supplement on the purchase. In the Origin field, it will say Purchase surcharge, based on the entry that is posted as a purchase surcharge.

Add purchase allowance to an item's cost price

For example, freight costs may be included on the same invoice as the item(s), but the freight cost may also be received on a separate invoice, perhaps even from a completely different supplier than the goods. Purchase surcharges can therefore be entered both on a purchase order before the purchase invoice is posted, but also on a posted purchase invoice via the purchase invoice archive. If several surcharges are to be added to the cost price of the item, e.g. both freight and customs, it must be done one surcharge at a time. Purchase surcharge on an already posted invoice This solution is used when, for example, a freight invoice is received after the purchase invoice with the actual goods has been posted. The freight invoice is posted in the normal way, but subsequently the freight cost can be linked to the posted purchase invoice where the goods were purchased. This solution moves, for example, the freight cost from the income statement to the inventory account in status.

Post your freight invoice in the normal way, either via an accounting journal, purchase invoice or purchase order.
Select Accounts Payable/Reports/Invoices to distribute the freight amount for items purchased on a different purchase invoice than the invoice the freight was on
Place the cursor on the purchase invoice you want to attach the add-on to, i.e. the purchase invoice with the item purchase
Select the Purchase Surcharge button on the ribbon
Select the Add item button on the ribbon and add a line for each purchase allowance you want to attach to the items on the posted purchase invoice. It is possible to distribute the purchase surcharge based on the items on the purchase invoice cost values, weight, volume or carton size. It is also possible to choose whether the surcharge should only be applied to a single item, in which case fill in the Itemfield . If you want to distribute the surcharge to several items on the purchase invoice, but not all, simply add several purchase surcharge lines with different item numbers. If you use the "Cost value" distribution, you can distribute by "%" or by "Amount". If you use the distribution "Weight", "Volume" or "Carton" you can only use "Amount". See examples of this below.
Select the Book costs button

Surcharge on the same purchase order as the goods This solution is used when e.g. freight is part of the same purchase invoice as the goods

Select Accounts payable/Purchase orders and create a purchase order if it is not already created
If the purchase has already been created, place the cursor on the purchase order you want to attach the add-on to
Select the Purchase Surcharge button on the ribbon
Select the Add item button on the ribbon and add a line for each purchase allowance you want to attach to the items on the posted purchase invoice. See an example of this below.
Close the shopping add-on screen
Depending on the setup of the purchase supplement type, the freight must also be entered as a line on the purchase invoice itself. This is important, especially if VAT is to be calculated on the purchase supplement.
Post the purchase order in the normal way

Purchase allowance for a purchase order that has not yet been posted This solution is used when, for example, the shipping cost is received on a separate purchase invoice, but you would like to have the shipping cost distributed to the items on a purchase order that has not yet been posted.

Select Accounts payable/Purchase orders
Place the cursor on the purchase order you want to attach the add-on to
Select the Purchase Surcharge button on the ribbon
Select the Add item button on the ribbon and add a line for each purchase allowance you want to associate with the items on the purchase order. See an example of this below.
Select the Save button on the ribbon and close the shopping add-on screen
Post the purchase order in the normal way when you receive the purchase invoice from the supplier.

Procurement surcharges in percent and additional orders

If your surcharge setup is % instead of amount, then you should not use the "supplementary orders" feature, which allows you to purchase invoice lines from multiple purchase orders simultaneously. If you do this and you have defined the surcharge as a percentage on both purchase orders, you will get a surcharge of twice the amount you expect. If you only set the surcharge on one purchase order, you will get the correct amount of surcharge calculated, but the surcharge will only be applied to the items on one purchase order. Our recommendation is therefore that when using the percentage purchase surcharge and supplementary orders, you do not enter the percentage purchase surcharge on the purchase orders, but that you post the purchases using the supplementary orders function and only enter and post the percentage purchase surcharge after posting the purchase invoice as described above under "Purchase surcharge on already posted invoice".

Example 1 - Freight amount distributed by cost value

Purchased: 4 table legs for DKK 33 per piece 1 table top for DKK 125 per piece A purchase surcharge, e.g. freight of DKK 100, must be distributed based on the cost value of the goods. In other words, the most expensive item is allocated the most freight. The freight invoice is received on a separate purchase invoice and has already been posted, e.g. via an accounting journal. Create purchase add-on type Create a purchase add-on type as shown below:

Create purchase order Create a purchase order and add order lines as shown below. Read more here on how to create purchase orders and enter lines.

Connect purchase allowance From the overview of all purchase orders, select the Purchase Allowance button and add the purchase allowance as shown below

Book the purchase Now post the purchase invoice in the normal way.

The invoice looks like this:

Booked financial items In connection with the posting of the purchase invoice, the following items were posted. Note that the freight is credited to the account specified on the purchase surcharge type and debited to the warehouse receipt account specified on the product group of the goods to which the surcharge is assigned. When the freight cost was posted, it would probably have been posted in debit on account 2811 and in credit on the vendor summary account (freight supplier), so with the item below, the freight on the freight account is thus both debited and credited.

Cost of goods and line items In the inventory, the cost price fields of the affected items are updated with the cost price including the purchase surcharge on the item card, and on the item that was booked in connection with the purchase, the cost price will also include the purchase surcharge. The Net amount, Total amount and Quantity price fields on the item show the item's price excluding the purchase surcharge, so it is easy to see both the cost price including and excluding the purchase surcharge. When the item is sold, it is the cost price including the purchase surcharge that is deducted from the inventory and booked as cost of sales.

Example 2 - Purchase allowance with yes to Post on creditor

In example 1, if you had checked the Post to vendor box when creating the purchase allowance type, but otherwise did the same as described in example 1, the purchase allowance would be credited to the vendor instead of the freight account:

Example 3 - Freight distributed by weight

Purchases are made: 10 items of item A at DKK 8 per item and each item weighs 3 kg. = total weight 30 kg. 5 pieces of item B at DKK 5 per piece and each item weighs 2 kg. = total weight 10 kg. A purchase surcharge, e.g. freight of DKK 50, is distributed based on weight. The purchase surcharge will be calculated as follows: DKK 50. / 40 kg = DKK 1.25 per kg. The cost price per piece of item A is thus: DKK 8 + (3 kg * 1.25 supplement per kg = DKK 3.75) = DKK 11.75. The cost price per piece of item B is thus: DKK 5 + (2 kg * 1.25 supplement per kg = DKK 2.5) = DKK 7.5.

Example 4 - Shipping on the same purchase invoice as the goods

In this example, we buy a 'Doll' for DKK 200 plus VAT, and pay DKK 15 in freight plus VAT. (Freight is created in the warehouse as a service with a separate product group where the Purchase account field is filled in with the freight account. The freight is with VAT. We add this on two purchasing lines:

A purchase allowance is entered at the same time. It is important that the purchase allowance type is created without a check mark in the Items on vendor field .

When the purchase invoice is posted, the following financial entries are created:

This means that we have booked the purchase of the goods and freight (with VAT) and in the same journal we have moved the cost of the freight from expenses to inventory.

Example 5 - Purchase allowance discount on the same purchase invoice as the goods

In this example, we buy 4 pairs of 'Pants' for DKK 484 plus VAT of DKK 121, and pay 12% in customs. First, select the purchase order where you want to add the duty surcharge and then select 'Purchase surcharge':

The purchase supplement is selected by clicking 'Add item' and selecting the desired supplement, in this case 'Customs clothing'.

When the purchase invoice is posted, the following financial entries are created:

Recalculation of cost prices

If the cost is allocated when updating the purchase order, the cost price of the item will be updated automatically if you have selected this in your setup under Company/Maintenance/Preferences.

If you do NOT allocate the cost when updating the invoice, i.e. you only post the purchase supplement after the purchase invoice with the item has been posted, the item's cost price on the item card will not be updated. Only the item's cost price on the inventory entry is updated. When you create a sales order, the cost price is retrieved without the cost surcharge, and when the sales order is invoiced, the cost of goods sold and inventory is booked with that cost price. Therefore, it is very important that you run a recalculation of cost prices. The recalculation then retrieves the cost price including the cost and the cost of goods sold/inventory draw is updated with the new value.

Error: No lines to update

If you get the error: "No lines to update", check the following: Are purchase accounts set up on the product group for posting the purchase allowance? If not, this must be set up, otherwise an attempt will be made to post to the vendor group setup, which is not legal. Is "VAT" or "Mandatory VAT" set up on the account you are trying to post the purchase allowance to. Since VAT is not posted via the purchase allowance, "VAT" must not be set up and "Mandatory VAT" must be set to Optional.

Notes on the purchase allowance

Services are not affected by the distribution of the purchase allowance
VAT cannot be calculated on surcharges, so if VAT is to be calculated on the surcharge, e.g. freight, the freight must be booked both as a line item on an invoice to a supplier and as a purchase surcharge to distribute the surcharge to one or more items' cost price.
Remember that purchase allowance is not part of purchase invoicing, it is only used to allocate an amount to items on a purchase order/posted purchase invoice. If you want to increase the cost price of freight on the goods card AND post VAT on freight, you must both: - Enter a purchase line for freight (of which VAT is calculated by Uniconta according to the VAT code selected in the account setup) and; - Use the 'purchase supplement' function (where you enter the amount without VAT for distribution to the warehouse)

Remember that the item 'Freight' has an 'Item type', 'Service' and must have a special item group where the 'Purchase account' is set to the chart of accounts' freight expense account.
Procurement percentage surcharges should not be combined with the "Additional orders" feature. Read more about this in a separate section of this article.