Cost-of-Goods-Sold (COGS) Adjustment Propagation

EBMS allows a user to sell a product before the purchase order is processed.  If the cost of the item on a purchase order is changed after the item has been sold, EBMS updates the cost on all the documents that contain this item.  Purchase invoices can also be unprocessed after product is sold and COGS transactions have already been generated.  This process can be extensive depending on the number of steps that an item has traveled.  A simple link between the purchase order and the sales invoice requires very little processing.  More complex processes may include many transactions when manufacturing and multiple warehouses are involved.  A single line on a purchase order may also effect many sales orders, manufacturing batches, or warehouse transfers and will be multiplied if the cost within manufacturing effect multiple levels or if the item has traveled through multiple warehouses.  The following Allow propagation of adjustments option determines if value changes to a purchase order makes COGS adjustments for product already sold.

Complete the following steps to change the Allow propagation of adjustments option:

1. Select Inventory > Options > General tab from the main EBMS menu.
   

2. Set Allow propagation of adjustments option.

   1. Disable option to keep the financials accurate but not propagate the new cost of goods sold value to the product when it is sold.

   2. Enable option to verify that any cost adjustments on the purchase order are immediately propagated to all COGS or warehouse product values.  This option can increase processing time if product costs are often changed after product is move or sold.