UNITS

This topic discusses how units are set up, entered, and included in revenue and billings. Information on unit COGS (Cost of Goods Sold) recognition and warranty expense accruals for units is also included. The Sales Group Abbreviation code, which allows you to recognize unit cost and sales for one project and post billings to another project, is also discussed. Finally, some examples of both valid and invalid unit setups are provided.

This topic is organized as follows:

• Setup of Units

• Entering and Posting Units

• Revenue on Units

• Billing for Units

• Unit Cost Recognition

• Unit Warranty Expense Accrual

• Default Accounts

• Sales Group Abbreviations

• Setup Examples

Setup of Units

Before they can be included in revenue or billings, you must first set up units as items (parts, goods, or services) in Costpoint Product Definition, an add-on product used with Costpoint Purchasing, Inventory, Sales Order Entry, and Billing. To take full advantage of the unit features in Costpoint, you must use Product Definition. Without Product Definition, billing for units is limited to entering generic-type bills on the Manage Project Product Bills screen and the Manage Customer Product Bills screen. In addition, if you are planning on recording unit COGS and/or unit warranty expense accruals, you must use the Sales Group Abbreviation code feature, which is available only through Costpoint Product Definition.

After setting up items as parts, goods, or services, you must further define them on the Manage Item Billings screen before you can link them to project pricing or to generic price catalogs. You can also enter additional information regarding selling descriptions and shipping dimensions in this screen.

There are two methods for establishing pricing information for units: generic pricing catalogs in Costpoint Product Definition, and CLIN/project unit pricing (CLINs) in Costpoint Project Setup. (Please note that in Costpoint, the term "CLIN" is used in a generic sense to mean a pricing schema for a group of items to be used by and invoiced to a particular project.) A summary of their capabilities follows.

Generic Price Catalogs

As noted previously, you establish the generic price catalogs in Costpoint Product Definition. Think of catalogs as sets of items that you plan on billing to your customers. After establishing price catalogs on the Manage Price Catalogs screen, set up the product price catalogs on the Manage Product Price Catalogs screen, where you link the items to a specific price catalog, and where you enter the item prices, along with their associated quantities and date ranges. You can link more than one item to a given catalog; you can link the same item to more than one catalog.

You must follow several rules when initializing unit price information. Unit price information is entered on the Manage Product Price Catalogs screen. First, consecutive quantities from ".0001" to "9,999,999,999.9999" must exist for any given date range. If you do not enter the required range of quantities on a single line, you must continue it on subsequent lines for that same date range. The To Qty field of the previous line must contain the value "9,999,999,999.9999" before you can enter a new date range. Also, there cannot be any gaps or overlap in the date range.

Example of a Unit Price Schedule:

Items set up through the generic price catalogs use "total" pricing for all units charged to the price catalog/item/revision combination. Total pricing means that a set unit price is used for all items on a given order. If a price break is given based on quantity, the price break applies to ALL items on that order; not solely to the number of items above the price break quantity. (An example of total pricing is provided in the "CLINs" section.) You cannot use unit ceilings in the generic price catalogs, nor can you bill units automatically. You can, however, use both the Customer Product Bills and Project Product Bills, as well as the Standard Bills, with the generic pricing catalogs.

CLINs

You can also group a set of items that are used by and invoiced to a particular project by using the CLINs in the Projects folder. (Note that in Costpoint, the term "CLIN" refers to a specific pricing schedule for a group of items billable to a particular project. The actual prices for the CLIN items are set up on the Project Unit Pricing subtask of the Manage CLIN Information screen.) Using the Manage CLIN Information screen, establish the CLIN and description for the project. Using the Item Linkage subtask, link the items that are applicable to this CLIN. You can link more than one item to a given CLIN, and you can link the same item to more than one CLIN.

The Item Linkage subtask on the Manage CLIN Information screen contains the unit ceiling, automatic billing quantity, and basis for pricing information. This subtask also contains two columns, Quantity Sold To Date and Quantity On Order, that are used only if you have purchased Costpoint Sales Order Entry.

The unit ceilings set up on the Item Linkage subtask may be applicable to revenue, billing, or both. If you use the automatic billing quantity feature, the Calculate Standard Bills screen automatically generates an invoice each billing cycle for the number of items entered in the field. The basis for pricing, using CLINs, may be "total" or "incremental." As noted in the "Generic Price Catalogs" section, total pricing means that a set unit price is used for all items on a given order. Consequently, if a price break is given based on quantity, the price break applies to ALL items on that order, rather than solely to the number of items above the price-break quantity. Incremental pricing means that items on a single order can be priced at several different prices, based on the quantity pricing schedule (only the number of items ABOVE a given price-break quantity carry the lower price).

Example of Total Pricing vs. Incremental Pricing

Pricing Table:

Quantity of Units Billed: 200

Total Pricing:                   200      x           9.0000                       =          1,800.00

Incremental Pricing:         100      x          10.0000                      =          1,000.00                                                                    

                                      100      x           9.0000                       =            900.00                                                                            

                                                                                                          1,900.00

After setting up the CLINs and linking the items, enter the pricing information on the Project Unit Pricing subtask on the Manage CLIN Information screen. This screen is referenced for the unit prices and price increments that are used to compute unit-based billings and revenue for projects with unit-based revenue formulas. The same pricing rules noted in the "Generic Price Catalogs" section apply to CLIN pricing.

Both Project Product Bills and Standard Bills can use CLIN pricing. Customer Product Bills must use catalog pricing, because the CLINs require that a project be specified.

For a full discussion on the Cost Information, Warranty Information, and Defaults subtasks, which are accessed from the Project Unit Pricing subtask of the Manage CLIN Information screen, please see the appropriate sections later in this topic (Unit Cost Recognition, Unit Warranty Expense Accrual, Default Accounts).

Entering and Posting Units

Enter unit transactions on the Manage Unit Usage screen. Think of the Manage Unit Usage screen as a transaction entry screen, similar to the accounts payable voucher entry or timesheet transaction entry screens. Manage Unit Usage is different, however, from other transaction screens in that the unit posting is used for billing, revenue, and, optionally, unit COGS and warranty expense accruals. Instead of a voucher number or employee and timesheet date, unit usage uses a "document number" as a control mechanism.

Unit usage is always posted to the Maintain Units Usage History tables (UNITS_USAGE_HS, UNITS_USAGE_LN_HS), but you can also have it posted to billings (OPEN_BILLING_DETL) and service centers (ALLOC_BASIS_JNL). If you want the units to be included in billing, you must establish the Manage Project Billing Information screen with a transaction-based formula before posting the units. This enables the Manage Open Billing Detail screen to be populated with the unit transactions.

Posting to a service center updates the Maintain Allocation Journal with a record for the account/organization/project combination. This record is placed in the pool allocation journal and has cost allocated to it during the Compute/Print Pool Rates process. Set up the service center as a "units" basis type with a "manual" calculation of base method.

Before accessing the Manage Unit Usage screen, complete the Configure Billing Settings screen to ensure the units are entered correctly. Complete the Last Usage Document No field so the next sequential document number defaults in when you save the Manage Unit Usage screen. As with other transaction entry screens, you can override the document number. Set up the Units Usage User Defined Field Labels in the Configure Billing Settings screen if you want to use them on the Manage Unit Usage screen. There are two numeric fields, one text field, and one date field available for use.

If you want a specific CLIN to default on the Manage Unit Usage screen, enter it on the Other Info subtask on the Manage Project Billing Information screen. In the Bill Inventory Issues As group box, select the Units option, and enter, or click to select, a CLIN. If you click , the corresponding project(s) for that CLIN are also displayed. The project associated with the CLIN selected then becomes the pricing source for the project entered on the Manage Project Billing Information screen. When you enter units on the Manage Unit Usage screen, the CLIN and Source Project default in when you enter the project. By referencing the pricing information of another project, you can save setup time when establishing your pricing tables.

Also, on the Configure Billing Settings screen, you have the option of indicating whether the unit COGS is billed or incurred. If you select the Billed option, the unit COGS, as well as the optional warranty expense accrual, are recorded when the bill is posted. If you select the Incurred option, these accruals are recorded when the unit usage is posted. Unit COGS and warranty expense accruals are optional. If you do not want to record either of these accruals, do not enter any cost or warranty information on the Project Unit Pricing subtask on the Manage CLIN Information screen (for CLINs) or on the Manage Product Price Catalogs (for catalogs) screen, and do not select any unit COGS, inventory clearing, or warranty accounts on the Set Up Sales Group Abbreviations screen.

You can post either the unit cost or unit usage (price times quantity) to the Manage Open Billing Detail screen to be included on a standard bill. To include the unit cost in a standard bill calculation, you must charge units to an account that has been designated on the Manage Project Account Groups screen with a NON-LABOR Function Code. To include the unit usage in a standard bill calculation, you must charge units to an account that has been designated on the Manage Project Account Groups screen with a UNITS function code. Therefore, using the UNITS Function Code allows you to record both the unit cost and usage to the same account, and to bill only the unit usage. Note that an improper setup of the function codes and unit cost of sales methods can result either in no units being billed or in a duplicate billing that includes both the unit cost and usage. For examples of different setups, please see the "Setup Examples" section later in this topic (Unit Cost Recognition, Unit Warranty Expense Accrual, Default Accounts).

You can use either a CLIN or a catalog on each line of the Manage Unit Usage screen. For a specific project, you cannot enter units used for any item that has been set up with an automatic billing quantity on the Item Linkage subtask on the Manage CLIN Information screen for that project. Following entry, print a Usage Edit Report and make any necessary modifications. When you post the units, the Manage Units Usage History screen is populated with an exact record of the document as it was entered on the Manage Unit Usage screen. For this reason, units are not included on the report when the Post Unit Usage screen is executed. If you want a hard copy of the unit transactions, retain a final copy of the Usage Edit Report.

Revenue on Units

To calculate revenue on projects with units, select the Calculate Revenue on Units check box on the Manage Revenue Information screen. This enables revenue to be calculated on units, in addition to the revenue that is calculated based by the revenue formula. Note that you must enter one of the following transaction-based revenue formulas for unit revenue calculations to be allowed:

• Fee on Hours plus Cost Incurred

• Contract Value times % Complete vs. Rate Schedule

• Cost plus Fee On Cost

• Labor Cost times Multiplier plus Non-Labor times Multiplier (Cost and Hours)

• Loaded Labor Rate

• Loaded Labor Rate plus Cost Incurred On Non-Labor (T&M)

• Loaded Labor Rate w/Burden w/Fee plus Non-Labor w/Burden w/Fee

• Loaded Labor Rate w/Fee plus Non-Labor w/Burden w/Fee

• Loaded Labor plus Non-Labor Plus Burden On Non-Labor

• Loaded Labor plus Non-Labor w/Burden w/Fee

• Rate Schedule times Multiplier plus Non-Labor times Multiplier

If you try to use a revenue formula, other than the ones listed previously, with unit-based revenue, Costpoint displays the following error message: "This fixed amount formula is not allowed to have unit revenue." If you want to calculate unit-based revenue only, and not include any non-unit-based revenue, use the Unit Revenue Only revenue formula. Do not select the Calculate Revenue on Units check box if you are using this formula. For revenue formulas containing units, an account designated with the function code of REVENUE must exist in the Project Account Group of the project. This account does not need to be linked to the project.

If you use the automatic billing quantity feature, this function applies to billing only. Because those items are not entered through the Manage Unit Usage screen, revenue is not calculated on them using a transaction-based formula. Therefore, if you use the automatic billing quantity feature, use one of the two Revenue Equal To Billings formulas to capture the revenue on those items.

If you are initializing Costpoint for a fiscal year already in progress, enter the current-year unit usage transactions, which have already been posted, on the Manage Units Usage History screen. That screen and the Manage Unit Usage screen form the current year-to-date file for a given document. This file is the source for any unit-based revenue formulas. For projects that began earlier than the current fiscal year and that use a unit-based revenue formula, complete the Manage Prior Year Unit Revenue screen. This screen is used in the calculation of the units in excess of ceiling.

Billing for Units

You can accomplish billing for units via three separate types of invoices: Standard Bills, Customer Product Bills, and Project Product Bills.

Standard Bills

To bill units using the standard bills process, follow the same steps as for non-unit standard bills. You must complete the screens in the Controls menu in Costpoint Billings, including Manage Remittance Addresses, Manage Billing Cycles, and Manage Billing User Groups. On the Manage Generic Billing Formats screen, you can include units on any bill by using UNITS as the Line Type. This may cause multiple lines, representing each of the different units, to be printed on the bill, even though there is only one line on the billing format. Complete the Unit subtask (of the Manage Generic Billing Formats screen) to customize the information that prints on the bill. If you are using the standard 1035 format, each unique unit/revision combination automatically prints on a separate line.

Complete the Manage Project Billing Information screen with a transaction-based billing formula before posting any unit usage. This enables the Manage Open Billing Detail screen to be populated with unit transactions when unit usage is posted. Note that if you select the Unit Price Transactions Only billing formula, Manage Open Billing Detail is populated only with unit transactions. Any items designated in the CLINs as automatic billing quantities do not appear on the Manage Open Billing Detail screen, but are still included on the bill.

Unit transactions are posted to Manage Open Billing Detail in the fiscal year, period, and subperiod in which they have been entered on the Manage Unit Usage screen. However, it is the usage date, as entered for each line in the Manage Unit Usage screen, that determines the price that is used in the billing and revenue computations.

Initialize the Manage Open Billing Detail screen with any unit transactions that have been posted but not included on a bill. The Transaction Type must be UNITS, and only the header data and Units group box require completion on the main screen. Additionally, you must complete the Units tab to provide additional data for the unit transactions.

For prior billed amounts, complete the Manage Billing History screen with summary unit transactions. The Transaction Type must be UNITS, and you must complete the Units group box and the Amount Billed field. For each project, organization, and account, you may find it helpful to enter one record for each unique CLIN or catalog, item, item revision, and unit price combination.

The remaining steps of the billing process, such as calculating, modifying, printing, and posting, are the same as for non-unit-based bills.

Customer Product Bills

If you have manual unit bills by customer to enter, print, and post, enter them in this screen. You can also enter discounts, sales tax, and other charges. The Calculate Standard Bills program does not update this screen, nor do amounts and units entered through this screen update the billing history tables. Because bills entered via this screen are manual, the ceiling and automatic billing quantity features are not in effect here. When you post, only the A/R History and G/L Detail tables are updated with these invoice amounts.

Because Customer Product Bills do not use a project number, you must use the price catalogs to default the item information into the screen. Following entry, you can modify, print, and post the bills in their respective screens, just like the standard bills.

Project Product Bills

Project Product Bills are similar to Customer Product Bills in their general capabilities. They differ from Customer Product Bills, in that Project Product Bills can use either the price catalogs or the CLINs, although Customer Product Bills can use only the price catalogs. For Project Product Bills, use either source for different lines on the same invoice.

Unit Cost Recognition

You can account for the cost of the units using two different methods. The first method assumes that you want to recognize the full cost of the units when they are purchased. You enter the cost of the units into Costpoint via accounts payable and charge them to a project-required account, such as materials, the same as any other project cost. Done in this way, the cost is shown on your income statement in the period in which it was entered and posted.

In the second method of accounting for unit costs, you use unit COGS. This method assumes that you want to retain the cost of the units on your balance sheet as a capitalized cost, and recognize a portion of that cost as the units are either billed or incurred, depending on your Cost of Sales Accrual method on the Configure Billing Settings screen. A transfer is made from the balance sheet, using an account such as inventory, to an expense account on your income statement for the cost of the units. When you use this method, a matching occurs between the units used or billed (and revenue recognized) and their cost. When you post the bill or unit usage, the unit COGS transfer is printed separately from, but on the same posting journal as, the bills or unit usage. Note that items that are billed using the automatic billing quantity feature are also included in the cost transfer if they have been included in the setup. You can use unit COGS with the standard, project product, or customer product bills.

This method works the same way whether the unit pricing is done through the generic pricing catalogs or through the CLINs. The Cost Information subtask on the Project Unit Pricing subtask of the Manage CLIN Information screen is available for both. When you open the subtask, you find two methods for recognizing unit cost: Percentage of Sales and Cost Schedule.

To use the Percentage of Sales method, select the Percentage of Sales option and enter a percent in the Enter Percentage of Sales to Calculate Cost Of Goods Sold field. To use the Cost Schedule method, select the Cost Schedule option and enter the appropriate rows in the Cost Details table window. The rules for entering a complete quantity range, which were noted in the Generic Price Catalogs section, are also in effect for the costing schedule. If you are using the Cost Schedule method, the date ranges do not have to match the Unit Price Schedule. However, to ensure that each date range on the Unit Price Schedule has a corresponding date range on the Cost Schedule, you may want to enter the same date ranges in both tables. Note that the cost schedule method allows for cost breaks based on "total" costing only, even if the cost schedule is entered using the CLINs, which allow for "incremental" pricing.

You must set up an account to serve as the unit clearing account. Costpoint uses this account to credit, or decrease, the amount of inventory costs on your balance sheet as the unit COGS are recognized. The account should be an asset type that points to a balance sheet line, such as "Inventory." The account does not need to be project-required unless you want a project posted to the general ledger for informational purposes. The unit COGS account is used to record the unit COGS on the income statement. Set up this account as a non-labor type that points to an income statement line, such as "Materials" or "Unit Cost of Goods Sold." This account does not need to be project-required, unless you want a project posted to the general ledger for informational purposes or you want it to appear on your project reports as a project cost. Because neither the COGS nor the unit clearing accounts must be project-required accounts, you do not have to include them in the project account groups or link them to the projects, unless you plan on using projects with them.

Please see the "Default Accounts" section for a full discussion on how the unit COGS recognition accounts are designated.

Unit Warranty Expense Accrual

You can record a unit warranty expense accrual with the COGS transfer. If it is your company's practice to provide a warranty with its products, you may want to automatically record this liability when the bills or units are posted. As with the COGS transfer, the warranty accrual prints separately on the same posting journal. Note that items billed using the automatic billing quantity feature are included in the warranty cost accrual if they have been included in the setup. As with the unit COGS function, you can use warranty expense accruals with standard, project product, or customer product bills.

You can set up unit warranty accruals the same way, whether the unit pricing is done through the generic pricing catalogs or through the CLINs; with either method, you can use the Warranty Costs subtask on the Project Unit Pricing subtask of the CLINs screen on the Manage Project User Flow. In this subtask, you can identify two different warranty codes with each item:  Manufacturer or External and Reseller or Internal. You must set up warranty codes on the Manage Warranty Information screen before you can select them in this screen. The two warranty codes do not have to be the same for a given item.

The same two methods, Percentage of Sales and Cost Schedule, that were available for the COGS transfer, are also available for the warranty expense accrual on the Warranty Costs subtask on the Project Unit Pricing subtask of the CLINs screen on the Manage Project User Flow. To use the Percentage of Sales method, select the Percentage of Sales option and enter a percent in the Enter Percentage of Sales to Calculate Warranty Costs field. To use the Cost Schedule method, select the Cost Schedule option and enter the appropriate rows in the table window. You must complete at least one row in the table window, with no gaps in or overlaps of the dates. If you are using the Cost Schedule method, the date ranges do not have to match the Unit Price Schedule and the COGS Cost Schedule. However, to ensure that each date range in the Unit Price and COGS Cost Schedules has a corresponding date range in the Warranty Cost Schedule, you may want to enter the same date ranges in all three tables. The warranty expense accrual method does not have to be the same as the COGS method. In other words, you can recognize COGS by a cost schedule and accrue warranty costs by a percentage of sales or vice-versa.

You must set up accounts to record the warranty expense and warranty accrual. The warranty expense account should be a non-labor type that points to an income statement line. The account does not need to be project-required, unless you want a project posted to the general ledger for informational purposes or you want it to appear on your project reports as a project cost. The warranty accrual account should be a liability type that points to a balance sheet line. This account does not need to be project-required, unless you want a project posted to the general ledger for informational purposes. Because neither the warranty expense nor the warranty accrual accounts must be project-required, you do not have to include them in the project account groups or link them to the projects, unless you plan on using them with projects.

Please see the "Default Accounts" section for a full discussion on how the unit warranty accounts are designated.

Default Accounts

In order for Costpoint to use the correct accounts for the COGS and warranty expense accruals, you must first identify them as the default accounts on the Set Up Sales Group Abbreviations screen. You must use the sales group abbreviation regardless of the pricing method used (generic pricing catalogs or CLINs). For a full discussion on Sales Group Abbreviations, please see the appropriate section later in this topic.

On the Set Up Sales Group Abbreviations screen, enter a code to identify this particular group in the Sales Group Abbrev field. Highlight and select the four Transaction Types required for the COGS and warranty expense accrual.

Fill in the Proj Reqd column with either R (Required), S (Substitution Allowed), or N (Non-Project Related). R (Required) means that the project entered in the Project column is used in the billing posting. S (Substitution Allowed) means that the posting program reverts to the project being posted to obtain the account. N (Non-Project Related) means that a project is not used in the posting. If you selected R in the Proj Reqd column, you must enter a project in the Project column. If you selected S, you do not have to make an entry in the Project column because Costpoint uses the account from the project being posted. Also, if you have designated any of the transaction types used in the Sales Account Group as Non-Project Related, you cannot use an account that has been designated as a required project by selecting the Project Required check box on the Manage Accounts screen. Generally, unit cost of sales and warranty expense accruals must be designated as Substitution Allowed, to ensure the project billing the unit usage is also charged with the unit COGS and warranty expense.

Complete the remainder of the Sales Account Group table window by entering the accounts, organizations, and, if you are using them, the reference numbers.

If you are using the CLINs for unit pricing, link the sales account group to the CLIN by entering the Sales Abbrv Code on the Manage CLIN Information screen. This code serves as the default on the Item Linkage subtask, where it can be overridden.

If you are using the generic pricing catalogs, link the sales account group by entering the Sales Abbreviation Code in the Sales Group Abbrev field on the Manage Product Price Catalogs screen.

Sales Group Abbreviations

In the previous section, the Sales Group Abbreviation code was used solely to record unit COGS and warranty expense accruals while posting the bill to the same project. Revenue is recognized for the project when it is calculated and posted. However, with the Sales Group Abbreviation code, you can post your unit COGS, billings, and sales using many different scenarios.

For example, you could charge the unit COGS and recognize the sales for one project, yet post the bills to another project. Or you could record unit COGS for a project and post both the sales and bills to another project. You can implement these different scenarios using the Set Up Sales Group Abbreviations screen. Using the Proj Reqd column, designate the transactions types as using the same project as the bill, or specify a different one. Eight different transaction types are available, but select only the ones that are needed to complete your posting method.

In the first example given previously, your company can use separate organizations to represent different product groups. Each of these groups may be responsible for manufacturing a specific piece that goes into a final product. Each group can record its project costs, such as labor, materials, travel, and other direct costs. You may want each of these groups to recognize sales on their contribution to the final product. For billing purposes, however, the final product is billed to various customers using another project.

To accomplish this, access the Set Up Sales Group Abbreviations screen and select Cost of Sales Account, Clearing Account, Warranty Accrual Account, and Warranty Expense Account. Set these transaction types as Required to allow you to specify what project is to be charged. This means that the unit COGS and warranty expense accruals are not charged to the project that is billing the units.

Next, select the Sales Account Transaction Type and also mark it as R (Required) in the Proj Reqd column. You cannot select and save a Sales Account or a Deferred Revenue Account Transaction Type without also selecting either an Accounts Receivable Account or an Unbilled A/R Account. Select an Accounts Receivable Account Transaction Type and designate it as Substitution Allowed so that Costpoint uses the project of the bill you are posting for the accounts receivable account. Note that you must first select the Sales Order check box on the Set Up Sales Group Abbreviations screen before you select Accounts Receivable Account. Costpoint Sales Order Entry is an add-on module that allows manufacturing and inventory companies to streamline their order processing.

When you post the bills or units, instead of unbilled receivables being credited, the account specified as the Sales Account is credited with the sales. In other words, the sale is recognized when the bill is posted. In this scenario, use the revenue formula Equal To Project Ledger Sales to capture the proper amount of revenue when the bill is posted and revenue is calculated. You can post the sales to a Deferred Revenue Account, where it is recorded as a liability until it is reclassified as revenue.

In some scenarios, you may need an Unbilled A/R Account Transaction Type to make up the difference between the billed A/R account, which is always debited, and the credit accounts, such as sales, sales tax, and shipping charges.

The Sales Group Abbreviation can be used with the Standard Bills, Project Product Bills, or Customer Product Bills. To find the accounts to use, Costpoint checks the Sales Group Abbreviation first, followed by the Default Accounts on the Manage Customers screen, then the accounts set up on the Configure Accounts Receivable Settings screen.

The Sales Group Abbreviation allows your company to set up many different scenarios. Before establishing a group, you should consider the projects, organizations, and accounts that are affected when the bill is posted.

Valid Setup Examples

You can use many different setup scenarios to bill units. The effect on the various tables depends on the function codes used and the unit cost of sales method. Several valid scenarios, along with their effect on the General Ledger Detail and Open Billing Detail tables, are presented below:

Valid Scenario #1

• Incurred Cost of Sales Method

• UNITS Function Code (on the Manage Account Groups screen) to record unit usage on the Manage Unit Usage screen.

• Cost of Sales Account, Warranty Accrual Account, and Warranty Expense Account Transaction Type on the Set Up Sales Group Abbreviations screen to record COGS and warranty expense accrual

Unit Usage Posting

General Ledger:

Open Billing Detail:

Only the unit usage is posted to the Open Billing Detail table and is eligible for inclusion on a standard bill. Costpoint determines the amount billed by multiplying the unit quantity by the unit price. These records in the Open Billing Detail table have a UNITS Transaction Type on the Manage Open Billing Detail screen and have the Units group box and Units subtask completed. COGS and warranty expense accruals do not populate the Open Billing Detail table because they use a UNITS Function Code.

Valid Scenario #2

• Incurred Cost of Sales Method

• NON-LABOR Function Code (on the Manage Account Groups screen) to record unit usage

• Cost of Sales Account, Warranty Accrual Account and Warranty Expense Account Transaction Type on the Set Up Sales Group Abbreviations screen to record COGS and warranty expense accrual

Unit Usage Posting

General Ledger:

Open Billing Detail:

Only unit COGS and warranty expense records are posted to Open Billing Detail. Costpoint determines the amount billed by the amount of COGS and warranty expense recorded. These records in the Open Billing Detail table have a COST Transaction Type on the Manage Open Billing Detail screen and have the Cost group box completed. The unit usage does not populate the Open Billing Detail table because it uses a NON-LABOR Function Code.

Valid Scenario #3

• Billed Cost of Sales Method

• UNITS Function Code (on the Manage Account Groups screen) to record unit usage

• Cost of Sales Account, Warranty Accrual Account and Warranty Expense Account Transaction Type on the Set Up Sales Group Abbreviations screen to record COGS and warranty expense accrual

Unit Usage Posting

General Ledger:

No effect until the bill is posted.

Open Billing Detail:

Unit usage records are posted to the Open Billing Detail table when the unit usage is posted. The COGS and warranty expense accruals do not populate the Open Billing Detail table because they have a UNITS Function Code.

Bill Posting

Invalid Setup Examples

The following scenarios are viewed as invalid or improper because they either duplicate the unit billing (both usage and cost) or they do not bill any units at all:

Invalid Scenario #1

• Incurred Cost of Sales Method

• UNITS Function Code (on the Manage Account Groups screen) to record unit usage

• Cost of Sales Account, Warranty Accrual Account and Warranty Expense Account Transaction Type on the Set Up Sales Group Abbreviations screen to record COGS and warranty expense accrual

Unit Usage Posting

General Ledger:

Open Billing Detail:

Unit usage records as well as COGS and warranty expense accruals are posted to the Open Billing Detail table. This setup is improper because you bill the customer for both the unit cost and the unit usage (price times quantity).

Invalid Scenario #2

• Incurred Cost of Sales Method

• NON-LABOR Function Code (on the Manage Account Groups screen) to record unit usage

• Cost of Sales Account, Warranty Accrual Account and Warranty Expense Account Transaction Type on the Set Up Sales Group Abbreviations screen to record COGS and warranty expense accrual

Unit Usage Posting

General Ledger:

Open Billing Detail:

No records update the Open Billing Detail table, because you cannot bill unit usage using a NON-LABOR Function Code, and you are recording unit COGS and unit warranty expense using a UNITS Function Code.

Invalid Scenario #3

• Billed Cost of Sales Method

• NON-LABOR Function Code (on the Manage Account Groups screen) to record unit usage

• Cost of Sales Account, Warranty Accrual Account and Warranty Expense Account Transaction Type on the Set Up Sales Group Abbreviations screen to record COGS and warranty expense accrual

Unit Usage Posting

General Ledger:

No impact until the bill is posted.

Open Billing Detail:

No records are posted to the Open Billing Detail table, because the usage does not contain a UNITS Function Code and the COGS and warranty expense accrual uses a UNITS Function Code. In addition, because the Billed Cost of Sales method is being used, the unit COGS is not billed or posted.

Bill Posting