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Thread: Average Costing in Sage Pastel

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    Average Costing in Sage Pastel

    Hi there

    I need some advice on managing average costs in Pastel. The issue is as follows:
    The client sells parts, thousands of different parts.
    The client sometimes gets opportunities to do buy-outs where they would say buy a part that usually costs R200 for (as an example only) R10.

    This greatly affects the average costs of the items, the only problem is that this has an affect on periodic management reporting.

    My question is whether there is a workaround to stabalize the average costs in a manner that gross profit margins on the management report doesn't flunctuate so terribly from time to time?

    Secondly, how can this be implemented in Sage Pastel?

    Thank you in advance

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    Diamond Member Neville Bailey's Avatar
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    I would suggest that you activate GRNs as mandatory (if you have not done so already) and then, when you bring a grossly discounted item into stock via a GRN, you capture a more realistic unit cost for the item, rather than the actual unit cost.

    This will bring in the stock at the higher cost.

    When you capture the Supplier Invoice for that delivery and match it to the GRN, you will use the actual unit cost of the items, so that the supplier account is credited correctly. The system will then take the difference between the GRN value and the Supplier Invoice value to a Purchase Variance account which, by default, is part of your Cost of Sales financial category.

    You might want to re-categorise the Purchase Variance account away from the COS category.
    Neville Bailey - Sage Pastel Accounting Consultant
    www.accountingsoftwaresupport.co.za
    neville@accountingsoftwaresupport.co.za
    IronTree Online Solutions

    "Give every person more in use value than you take from them in cash value."
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    Quote Originally Posted by Neville Bailey View Post
    I would suggest that you activate GRNs as mandatory (if you have not done so already) and then, when you bring a grossly discounted item into stock via a GRN, you capture a more realistic unit cost for the item, rather than the actual unit cost.

    This will bring in the stock at the higher cost.

    When you capture the Supplier Invoice for that delivery and match it to the GRN, you will use the actual unit cost of the items, so that the supplier account is credited correctly. The system will then take the difference between the GRN value and the Supplier Invoice value to a Purchase Variance account which, by default, is part of your Cost of Sales financial category.

    You might want to re-categorise the Purchase Variance account away from the COS category.
    Hi Neville

    Thank you for the response.

    Could you perhaps advise me on how to implement this?

    It seems like the best way forward

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