SP3633 - Retail (RO) - Inventory Accounting Management

7/28/2019 SP3633 - Retail (RO) - Inventory Accounting Management

1/9

Project Specificationspage

1/9

Project # Title

3633 Retail (RO) - Inventory Accounting Management

Last Update: 3-Nov-08

Contents:

1 PURPOSES................................................................................................................................................................1

2 REQUIREMENTS....................................................................................................................................................2

2.1 GENERALFACTS..................................................................................................................................................2

2.2 PARAMETERS.......................................................................................................................................................22.3 STORAGES............................................................................................................................................................3

2.4 ITEMS MASTER....................................................................................................................................................32.5 INVENTORY REASONSAND EATSSETTINGS.......................................................................................................3

2.6 DEFAULT PRICES.................................................................................................................................................42.7 CHANGEOF RETAIL PRICES.................................................................................................................................4

2.8 ACCOUNTING OPERATIONS..................................................................................................................................52.8.1 Simple Purchase..........................................................................................................................................5

2.8.2 Simple Sale..................................................................................................................................................5

2.8.3 Retail Price re-evaluation...........................................................................................................................6

2.8.4 Goods Receipts............................................................................................................................................6

2.8.5 Invoice of previously received goods..........................................................................................................6

2.8.6 Retail Sale (Fiscal Receipt).........................................................................................................................6

2.8.7 Retail Return (Correction Receipt).............................................................................................................7

2.8.8 Retail Sale with a discount..........................................................................................................................7

2.8.9 Retail Sale for a different price...................................................................................................................72.8.10 Correction Invoice (price change)............................................................................................................7

2.8.11 Return to Supplier prior the invoice.........................................................................................................8

2.8.12 Correction Invoice for Return to Supplier................................................................................................8

2.8.13 Return to Supplier after the Invoice, then Correction Invoice..................................................................8

2.8.14 Transfer from non-retail to retail..............................................................................................................8

2.8.15 Transfer between shops.............................................................................................................................9

2.8.16 Correction Invoice of transferred goods (price change)..........................................................................9

1 PurposesRomanian Retail Companies must keep inventory values at the expected sale price, VAT

included.

This applies also to companies which have not retail as main activity, but, for example, produce

goods for wholesale and also have a shop for direct sell to the public.

In this latter case the inventory at sale price must be kept only for storages associated to sale

points.


2/9


2/9

2 Requirements

2.1 General factsThe management described in this document is enabled for Romania only, as it strictly related to

fiscal rules and habits of that country.

Here are the main characteristics:

Each good have an official expected sale price. In case of mixed wholesale/retail

activity, only the storages which deal with retail have a sale price. The price may be

different from storage to storage

Once some goods enter the company (or a storage devoted to retail) their cost is

accounted as usual; their margin (expected sale price cost) is posted on a special

account, and the VAT on the whole expected sale price is accounted on the settlement

VAT account When selling, the revenue and the cost are accounted as usual; then the expected margin

and VAT are cleared from the related accounts

If the expected sale price changes, the expected margin and settlement VAT accounts are

updated accordingly

When moving goods from/to retail storages to/from non-retail storages the expected

margin and VAT are accounted accordingly

When selling with a discount, the revenue is accounted with discounted values, while the

expected margin is cleared according to full price

When selling with a different price, the price change is accounted to expected margin

and settlement VAT, then the sale is posted as for the updated price

2.2 Parameters

In Parameters and Services, Parameters, Inventory, Inventory Accounting parameters is possible

to set if the company is managing Retail sales or not. Within a groupbox retail management is

possible to set:

Field Type Description

No retail Radiobutton The company is managing wholesale only, and retail-

specific functions for accounting are disabled

Retail only

(Item Base Price is the

official retail price)

Radiobutton The company is managing retail only. The retail-

specific functions for accounting are enabled and

there is only one official retail price, which is the

Item Base Price (Items Master)

Retail and Wholesale

(storage-based standard

retail price)

Radiobutton The company is managing both retail and wholesale.

This means that some storages keep goods for retail,

some other for wholesale.

Note: this option is available only if per-storage

accounting is enabled (Parameters and Services,

Parameters, Inventory, Inventory Parameters, flag

Use a separate account for storage


3/9


3/9

2.3 StoragesIn case that mixed Retail/Wholesale management is enabled (see Parameters), in the storage

master (Inventory, Tables, Storages) it is possible to set that the storage is used to keep goods

for retail.

This will enable to set a standard retail price for the items in such storage (see Items Master) and

will enable retail-specific accounting operations while transferring goods in/out from this

storage.

2.4 Items Master

In case that mixed Retail/Wholesale management is enabled (see Parameters), in the items

master (Inventory, Master data, Items) an extra tab dialog is available which permits to set thestandard retail price for each storage which keeps goods for retail (see Storages). A grid with the

following columns is available:

Field Type Description

Storage String Storage for which to set the standard retail price. It is

possible to pick only a storage enabled for retail (see

Storages)

Standard Price Money Standard retail price for the current item in the

selected storage

Tax Checkbox If checked, the price is considered to be Tax

included. When using this price in any document, theTax will be added or stripped off according to this

flag.

Note: whenever an item will be transacted on a storage for which the standard retail price is not

set, a warning will be displayed, and the accounting operations will fail.

2.5 Inventory Reasons and EATs settings

Most of the job of doing the proper accounting for managing the retail scenario is done via a

proper setting of the Inventory reasons and related EATs.

In order to do this, specific symbols to be used as accounts and amounts are available:

Account Symbol Description

PRICEDIFF Account used to store the margin, that is the difference between

the goods cost and the expected sale price (378 in the standard

Romanian Chart of Accounts).

VATSETTL VAT Settlement account, used to store the expected collected

VAT on the expected sale price (442.8 in the standard

Romanian Chart of Accounts). It is worth to note that this

account code is normally the same as those associated to the

SUSPVAT symbol; as the meaning is however different, the


4/9


4/9

two symbols must differs in order to distinguish their meaning

in the account formulas

Such symbols are normally associated to the accounts in the Inventory Accounting Transaction

Default screen (Parameters and Services, Parameters, Inventory).

Association can be done also at storage level (Inventory, Tables, Storages), Commodity

Category level (Inventory, Tables, Categories, Commodity Categories) or item level (Inventory,

Master Data, Items).

Amount Symbol Description

ITMSLPRICE Items standard retail price, net of tax (already multiplied by

line quantity). The price is the base price of the item or those

associated to the current storage according to the mixed

Retail/Wholesale management setting (see Parameters).ITMSLTAX VAT on item standard retail price (already multiplied by line

quantity), determined as described above.

LINESLPRICE Sale price of the documents line (already multiplied by

quantity), net of tax and before applying the discount, if any.

LINESLTAX VAT on sale price of the documents line (already multiplied

by quantity)

RETAIL Logical value, evaluate to TRUE if either retail only is set or

mixed Retail / Wholesale is set and the current storage is

enabled for retail. Useful for building expressions which

evaluate to non-zero only in retail scenarios, using the ternary

? operator (i.e.: RETAIL ? LINECOST : 0.0)

While calculating formulas, in case retail scenario is not set (see Parameters), the symbols

ITMSLPRICE and ITMSLTAX will always evaluate to 0.

2.6 Default Prices

When retail is set, either mixed or not, a retail sale should normally occurs at the standard retail

price.

This means that the retail price should normally override the default price proposition schema.

To support this, during the creation of a Fiscal Receipt or Correction Receipt the default price

proposed is always the standard retail one (that is, item base price if retail only is set, storageretail price if mixed Retail/Wholesale is set and the current storage is enabled for retail).

The user has always the possibility to manually change the proposed price or choose a different

proposal by picking it from the unit value combobox.

2.7 Change of Retail Prices

When the company decides to change one or more retail price, this imply not only updating the

standard price of the affected items, but also reflecting these changes in the stock value, margin

and VAT under settlement from the accounting point of view.

For doing this, a special option Change of Retail Prices is provided in the Inventory Menu.


5/9


5/9

Such function is organized as a wizard and allows the user to:

Select the item for which to change the price. Item can be selected by code or categories

Select the storage for which the price change will occurs, only if mixed Retail/Wholesalemanagement is enabled (see Parameters).

Individually select and assign new prices to extracted items, or applying changes to all of

them (i.e.: raising them up of 10%), or both

Select the accounting template, reason, etc. to use to post the price changes into the

accounting.

Upon confirmation, standard retail prices of selected items will be updated, and the

corresponding changes in accounting amounts will be posted. The account set for the items and /

or storages will be used, see the details about the posting in 2.8.3 Change of Retail Prices.

2.8 Accounting OperationsHere are listed the accounting operations to be done in correspondence to the most common

activities. This gives a general rule of behaviour in real-life operations.

Note: the accounts shown refer to the standard Romanian Chart of Accounts, sample

subaccounts (i.e.: for storages) are used when needed. The EATs and reasons shown are those of

the default data set.

2.8.1 Simple Purchase

When posting a purchase operation (invoice and goods receipt together), the Purchase Invoice

has to be posted as usual; furthermore, the expected margin and VAT on expected sale price

have to be accounted, too. This is done via 2 accounting postings:

Purchase Invoice Accounting Posting

371 Goods to be Sold = 401 Suppliers

442.6 Input VAT = 401 Suppliers

Margin posting, through Inv.Reason 0101, EAT 0101

371 Goods to be Sold = 378 Price diff. on goods for resale margin

371 Goods to be Sold = 442.8 VAT under settlement VAT on sale price

2.8.2 Simple Sale

When posting a sale operation (invoice and delivery together), the Sale invoice has to be posted

as usual. In non-retail scenarios, the inventory issue also posts the CIG; in retail scenarios thissecond posting also clear the expected margin and VAT.

Sale Invoice Accounting Posting

411 Customers = 707 Sale of goods purch. for resale

411 Customers = 442.7 Output VAT

CIG + margin posting, through Inv.Reason 0201, EAT 0201

607 Goods for resale = 371 Goods to be Sold CIG

378 Price diff. on goods for resale = 371 Goods to be Sold margin

442.8 VAT under settlement = 371 Goods to be Sold VAT on sale price


6/9


6/9

2.8.3 Retail Price re-evaluation

A change in the standard price imply a change into the expected margin and suspended VAT.

Price Change Accounting Posting

371 Goods to be Sold = 378 Price diff. on goods for resale Margin change

371 Goods to be Sold = 442.8 VAT under settlement VAT on Sale change

2.8.4 Goods Receipts

After posting the goods expected cost and suspended VAT, the expected margin and sale VAT

are also posted.

BoL Accounting Posting, through Inv.Reason 0100, EAT 0100

371 Goods to be Sold = 408 Supplier Invoice to be received

442.8 VAT under settlement = 408 Supplier Invoice to be received371 Goods to be Sold = 378 Price diff. on goods for resale margin

371 Goods to be Sold = 442.8 VAT under settlement VAT on sale price

2.8.5 Invoice of previously received goods

In case the invoiced price is not different from the one on BoL, only the normal Invoice posting

occurs, and there are no differences between retail and non-retail scenarios.

In case of price change, in non-retail scenario an adjustment of goods inventory value is done. In

retail scenarios also an adjustment of the expected margin must be done.

Purchase Invoice Accounting Posting + adjustments via EAT 0109

408 Supplier Invoice to be received = 401 Suppliers442.6 Input VAT = 442.8 VAT under settlement

371 Goods to be Sold = 401 Suppliers Cost difference

442.6 Input VAT = 401 Suppliers VAT difference

Price difference posting, through Inv.Reason 0104, EAT 0021

371 Goods to be Sold = 378 Price diff. on goods for resale Margin difference

Note: in case the actual purchase price is higher than the expected, and thus the margin

difference is negative, it has to be posted with negative value.

2.8.6 Retail Sale (Fiscal Receipt)Retail sale is pretty similar to normal sale invoice, with the difference that the income is

immediately posted on the cash account.

Fiscal Receipt Accounting Posting



531.1 Petty cash = 411 Customers

CIG + margin posting, through Inv.Reason 0201, EAT 0201

607 Goods for resale = 371 Goods to be Sold CIG


7/9


7/9

378 Price diff. on goods for resale = 371 Goods to be Sold margin

442.8 VAT under settlement = 371 Goods to be Sold VAT on sale price

2.8.7 Retail Return (Correction Receipt)

A return of a retail sale is accounted exactly as a sale, but the amounts are posted as negative.

2.8.8 Retail Sale with a discount

In case of a discount applied during retail the accounting posting is the same as a normal sale,

with the difference that the sale account (707) is posted for the discounted price, while the

expected margin (378) is cleared for the expected price.

2.8.9 Retail Sale for a different price

In case of a retail sale for a price different from the standard one, the law says that the pricedifference must be accounted in order to permit the sale at the new price.

The accounting operations resemble those of the normal sale, but the margin and VAT re-

evaluation are posted before their clearing, which is done at the revaluated price.

Fiscal Receipt Accounting Posting



531.1 Petty cash = 411 Customers

Re-evaluation, CIG and margin posting, through Inv.Reason 0201, EAT 0201

371 Goods to be Sold = 378 Price diff. on goods for resale margin re-evaluation

371 Goods to be Sold = 442.8 VAT under settlement VAT re-evaluation607 Goods for resale = 371 Goods to be Sold CIG

378 Price diff. on goods for resale = 371 Goods to be Sold margin on new price

442.8 VAT under settlement = 371 Goods to be Sold VAT on new price

2.8.10 Correction Invoice (price change)

In case of a correction of price for item previously invoiced, the correction posting must adjust

the margin

Correction Purchase Invoice Accounting Posting



Price difference posting, through Inv.Reason 0104, EAT 0021

371 Goods to be Sold = 378 Price diff. on goods for resale Margin difference

Note: in case the new purchase price is higher than the original, and thus the margin difference

is negative, it has to be posted with negative value.


8/9


8/9

2.8.11 Return to Supplier prior the invoice

If goods loaded via a BoL are returned before the Purchase Invoice, the accounts posted by the

BoL are cleared by the cost of returned goods. Margin and suspended VAT are adjustedaccordingly.

RTS Posting, through Inv.Reason 0110, EAT 0110

408 Supplier Invoice to be received = 371 Goods to be Sold

408 Supplier Invoice to be received = 442.8 VAT under settlement

378 Price diff. on goods for resale = 371 Goods to be Sold Margin clearing

442.8 VAT under settlement = 371 Goods to be Sold Sale VAT clearing

2.8.12 Correction Invoice for Return to Supplier

In case items already invoiced are returned, the unloading of returned items must take care also

of the margin.


371 Goods to be Sold = 401 Suppliers value of goods

442.6 Input VAT = 401 Suppliers VAT of goods

Note: negative values

Inventory Return posting, through Inv.Reason 0107, EAT 0107



2.8.13 Return to Supplier after the Invoice, then Correction InvoiceIf goods already invoiced are returned to the supplier via an RTS, the supplier will send aCorrection Invoice later for the VAT clearing. In this case the RTS document is posted as seen

above (2.8.11 Return to Supplier prior the invoice), the Correction Invoice has no differences

from the non-retail scenario, as it just need to clear input VAT amounts.

RTS Posting, through Inv.Reason 0110, EAT 0110

408 Supplier Invoice to be received = 371 Goods to be Sold

408 Supplier Invoice to be received = 442.8 VAT under settlement



Correction Purchase Invoice Accounting Posting + adjustments via EAT 0119

408 Supplier Invoice to be received = 401 Suppliers

442.6 Input VAT = 442.8 VAT under settlement

Note: negative values

2.8.14 Transfer from non-retail to retail

In case some goods are transferred from a non-retail storage to a retail storage (shop), the

expected margin and VAT have to be accounted accordingly.

Transfer Accounting Posting (Inv.Reason 0020, EAT 0020)


9/9


9/9

371.21 Goods for Retail shop 1 = 371 Goods to be Sold CIG

371.21 Goods for Retail shop 1 = 378 .21 Price difference shop 1 margin

371.21 Goods for Retail shop 1 = 442.8 VAT under settlement VAT on sale price

2.8.15 Transfer between shops

In case goods are move from a shop to another with different price, margin and VAT are to be

accounted accordingly.

Transfer Accounting Posting (Inv.Reason 0020, EAT 0020)

378 .21 Price difference shop 1 = 371.21 Goods for Retail shop 1 Margin shop 1

442.8 VAT under settlement = 371.21 Goods for Retail shop 1 VAT shop 1

371.22 Goods for Retail shop 2 = 371.21 Goods for Retail shop 1 CIG

371.22 Goods for Retail shop 2 = 378 .22 Price difference shop 2 Margin shop 2

371.22 Goods for Retail shop 2 = 442.8 VAT under settlement VAT shop 2

2.8.16 Correction Invoice of transferred goods (price change)

In a correction of price occurs for item transferred to shops, the correction must, as usual, post

the value difference to the target storage, plus adjust the margin.




Price difference for arrival storage, through Inv.Reason 0104, EAT 0021

371 Goods to be Sold = 378 Price diff. on goods for resale Margin differencePrice difference for target storages, through Inv.Reason 0104, EAT 0021

371.21 Goods for Retail shop 1 = 371 Goods to be Sold Value difference

371.21 Goods for Retail shop 1 = 378 .21 Price difference shop 1 Margin difference

Notes:

in case the new purchase price is higher than the original, and thus the margin difference

is negative, it has to be posted with negative value.

in case the goods were transferred in more than one shop, the third posting will occurs

for all storages in which the goods were transferred.

Margin difference is calculated on goods transferred (or left) in the pertaining storage.

SP3633 - Retail (RO) - Inventory Accounting Management

Documents

Transcript of SP3633 - Retail (RO) - Inventory Accounting Management