Good day!

Am I correct in my understanding that in TinyERP, the cost of each product for receiving is according to the Purchase Orders approved by the supplier which can also be the basis for invoicing?

But is it also possible to capture shipping, handling, insurance, broker, and import fees (landed costs) and allocate these costs into the total cost price of each product received? As a result, my stock value in TinyERP will be based not only in the supplier's price but also in other costs involved in the acquisition of these products.

Sarah,

I would be very interested in helping developing such an extension or module. We thought about that a few months ago but we didn't go ahead because we couldn't think of an automated way to incorporate those costs when several products are bought in the same purchase order....

Do you have any suggestion on how to do it?

Regards,
Pedro

+1 for this feature. did you solve this in anyway?

I'm a newbie, could one use the manufacture module to achieve this since in a way it adds value to the product?

could it be possible to make a separate purchase order for the landed costs and attach it to the purchase order and the prices prorrogated to the products?


in regards to the module, i have very little IT knowledge just basic computer use, but some of you guys that have the wits and tools to make modules of all sorts could most likely create a module that attaches landed costs to the purchase order and then adds them to the products giving us the product cost (right?).

now, most supplier invoices include shipping and insurance costs, however customs, custom agency, internal shipping costs, etc. cannot be included until final delivery of the shipment; which means the attached landed costs would have to be and editable item until the purchase order is confirmed and invoice is created.

in my very rudimentary mind it doesn't seem like a complicated task (i dare be wrong):

-the module would have to add the total landed costs and divide it by the total of the product purchase, which would in turn spurt out the cost percentage

-the cost percentage could be multiplied to each product f.o.b. price in the purchase order and added to the unit price to calculate each product's cost price.

-total cost price and percentage could be displayed separately

** now thinking as i'm writing one problem i see on the rise would be with the payment to the supplier, because sometimes shipping costs (we get our supplies from overseas) are included in the invoice along with mercahndise insurance and so the payment for the products would have to be done in two parts; one for the products (f.o.b. price) and one for the shipping and/or insurance costs as these would have to be included in the landed costs and not in the purchase order itself. (or not?)


so what ya say? does this make any sense and most importanly, is it doable?

I think it's not so easy and this functionality need at less be dicussed before implementing.

I will try explaining with an example. You CAN'T calculate product cost according to a single purchase order. It could be totally wrong.

Imaging you buy in china and sale in USA. You buy 1000Units product A where cost is 1$ for product. You have to include transport, insurance and other costs... Imaging all of them 1000$ it's 1$ more for each product. That's OK... your product real cost is 2$

Now... you buy again. Another 1000Units for product A but on same shipment you are buying product B 2000Units. Both product purchase cost is 1$ for each product.
Your shipping cost including transport, insurance and other cost is only 1200$ because you bought much more products than first time. Buying product B is making your shipping cost cheaper... it could be more expensive maybe if you choose air transport and not boat transport. Doesn't mind. I only want to explain the problem.

So... now, you have got 1000 products A with 2$ cost for product, but you have got 2000product B and 1000 products A with 1$ cost each one and 1200$/3000 product shipping cost to add to second time bought products...

What is product A real cost???? 2$ for product? it is not. It is cheaper. 1$? no... it's higher. What would be the correct cost for product A in your company? What is product B cost on this case?

I think it's imposible to configure without using analytic accounting. After configuring correct analytic account tree on each case, you should define how you need exactly calculating product cost. After doing this, you need simply a little python function to be executed each time you make a purchase invoice, reproducing formula to calculate the correct cost and updating product form. So, i think it's not technical but functional problem here since you can contract your requirements to a python programmer to implement exactly what you need. I don't know if it can be possible building a general cost calculator for this. Maybe it is but I think it needs to be discussed.

Thank you!!!

Ana

Thank you Ana.

Talking and discussing about it ought make the light bulb glow. Which reminds me of this guy that was trying to do just that. He was told by many an acquaintance of his, "oh, dear Thomas you have failed one hundred times and what have you gotten from these failures, nothing." At this point he'd answer with a smile, "Oh but i have indeed. I now know 100 ways NOT to make a light bulb."

This is what I understand from what you have pointed out. Borrowing your example, say I purchase 1000 units of product A for 1 dollar each totaling 1000 dollars, for which shipping, customs and other fees total 100 dollars. So the cost percentage for these products would be 10%. Now say I order 500 units of product A for 1 dollar each 3 months from now and along with that I order 3000 units of product B for 50 cents of a dollar each which would sum a grand total of 2000 dollars, for which the shipping costs, customs and other fees remain at 100 dollars, rendering 5% in costs, since products A and B are sharing the landed costs. This would make product A bought the first time more expensive than Product A bought the second time. Now which price to use? i guess you could create a distinction between Products A (I) and Products A (II) by creating different products in ERP for each, in this case it would be possible to calculate the cost price directly to the product(s) and sell them as different products with different prices, but logistically this gives me the hibbi jibbies. I think it would be a nightmare to have to create a different product for the same product for every purchase order. Definitely not impossible but very time consuming.

From my side, the real concern i have regarding cost prices on products are two.

1. Adding cost prices to products from either the WebClient or the GTK Client is a very time consuming process. In this sense, a tool much like the picking form from stock management incoming/outgoing products would come very much in handy. Such that one could search by category/product code(s)/maybe even by invoice number/etc. and define the product costs for all the products in a single window instead of having to click over and back from one product form to the next. This could also, maybe, be accomplished using a CSV file and importing the cost price into the product(s) in one go (is this possible?). I am having trouble getting CSV to work properly so I can only imagine the possibilities of this since i don't have the means to test them just yet.

2. The other concern is keeping track of landed costs and cost percentages on purchase orders for future reference. Although now that I think about it, this can be done using the attachment tool to attach files of this demeanor. Keeping track of all the company's info in one tidy program like OpenERP is very useful. Having the capacity to interact external data with OpenERP data would verily be a plus.


happy day to all,

n.

Uploading cost by csv is not solution. You should calculate cost fiel outside openerp. That's not the point.

System is able to calculate cost on the way you define, if you are able to define it.

Solution is going trhoug analytic accounts...

thank you for your prompt reply Ana.

I am rather new to OpenERP and such systems so my understanding is still rather primitive.

You mention that the system is able to calculate costs if you are able to define how. How does the system do this?

I will read up on analytic accounts and see what i can gather. If you have any info and/or can direct me to a guide on how to use them, especially regarding costing, it would be of great help.


cheers,

n.

You first need defining the analytic account tree you need.

After that, you need installing some financial analytics modules so system will allow imputing cost to your analytic account from purchase invoice as example.

Difficulty is defining right correct analytic account tree or trees you need so maybe you need a financial consultant who could help you on it.

Hi all,

I think the workaround for calculating Landed Cost is to use a production order.

The real issue behind the landed cost is that different documents and costs has to be grouped and then to be able to calculate the valuation of the products.

If we use analytic accounts we could calculate the total costs, but further steps not implemented in OpenERP would be necessary to determine the costs per unit. Also It would be necessary to create a analytic account for each purchase.

With the production order we are able to group different inputs to produce a specific output and to get the right valuation per unit.

Actually, independently of OpenERP treatment what we are doing is a transformation process. We are transforming goods that are in origin, adding freight costs, custom costs, other costs, etc to get the product a ready to sell.

Hope this helps

for each purchase order lines exists various price components
* product price
* freight
* customs duty
* discount
= expected value of purchased goods = value added to the stock.

for each of these components (except discount) separate invoices from different suppliers are expected.

the differenze between "ordered" price components and real invoices tend to be minimal after a while as users learn to compute correct components.

BTW the first argument is always - "we can't, we don't know ..."
But obviously for most business it's crucial to have correct prices for stockable products, if not all offers based on wrong/incomplete average prices are wrong and all calculation of contribution on product level are meaningless.

Hello to all

I read the whole blog,i had also a same requirement with little changes before going to add a comment first tell me if anyone had get the solution of your above problem ,,