Pre-Billing Inventory

This topic covers the suggested TAT codes and the procedure to control billing inventory in advance of purchasing from the supplier.

Here is an example:

  • Pre-billing customer for 288 units.

  • Current quantity-on-hand (QOH) is 39 units.

Suggested TAT Codes

Here is the Maintain TAT Codes (IN02) record for a TAT code that will be used to direct bill a customer for their pre-billed inventory:

  • The PBI TAT code will be used on the direct bill to invoice the customer. It updates Demand, Units/Dollars/COS in the sales statistics but does NOT reduce QOH, nor does it update the cost of sales (COS) and Inventory in the GL (which is accomplished by entering an identical GL account in both GL Account override fields, resulting in a 'wash' for the Cost value in the GL when this TAT code is used).

Here is the IN02 record for a TAT code that will be used on the order for a customer for their pre-billed inventory:

  • The PBS TAT code will be used on the order that will control shipping the goods to the customer once they have been received. It will result in a No Charge invoice to the customer. QOH will be reduced and the resulting GL posting will be a debit (DR) to COS and and a credit (CR) Inventory.

Flow of Documents

The customer wants to be invoiced in advance for 288 units:

  • Create a direct bill using TAT=PBI. Flags=YYYYN. QOH is not updated by this TAT code but an invoice is generated. Demand and sales stats are updated.

  • ORD=288 B/O=0 SHIP=288

  • QOH=39 AVAIL=39 Inventory quantities do not change at this point.

  • The resulting GL is DR A/R and CR Sales

Enter an order for the pre-invoiced stock, which will be used to control shipment of the goods to the customer. This will also trigger issuing a purchase order to the supplier.

  • Enter an order using TAT=PBS. Flags=NNNNY. Demand and Sales stats have already been updated by the Pre-Billing invoice; this TAT only updates QOH.

  • ORD=288 B/O=288 SHIP=0

  • QOH=39 B/O=288 AVAIL=(249)

A purchase order is issued for 249 units. When the stock is received, inventory quantities look like this:

  • QOH=288 B/O=288 AVAIL=0

The back order is released and the picking slip is printed to ship the 288 units.

  • When the shipment is invoiced, a No Charge invoice is produced.

  • QOH is reduced.

  • The resulting GL is DR COS and CR Inventory.

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