You work in purchasing and want your purchase orders to reflect the full cost of an order. This includes additional charges from a supplier or third party, for example, insurance, that aren’t shown on the purchase document itself but should still increase the purchase order total.
Let’s see how you can achieve this with the help of purchase elements!
Open Purchase Calculate Element Types.
Click + New in the top menu.
Enter INSURANCE in Code and Description.
For a general cost such as insurance, choose G/L Account in the Element Type column.
In Cost Account No., enter the G/L account where you want these costs to be posted.
In Element Charge Type, choose %-Value PE.
Create a new Purchase Order.
On the General FastTab, fill in the mandatory fields. On the Lines FastTab, add at least one Item line with a Quantity.
In the top menu, choose Prepare > Purchase Elements.
In Element Code, select INSURANCE. Columns such as Cost Type, Cost Account No., and Allocation/Calculation Type are filled automatically.
As this Purchase Element has %-Value PE as Charge Type, the number we add in the Value column is the percentage from the direct unit cost that gets added as an indirect cost, for example 2.
Close the Purchase Elements page.
On the Lines FastTab, personalize the page and add the Unit Costs Calculated (LCY) field to view the calculated unit cost.
Compare the Direct Unit Costs per PU (from the vendor document) with the calculated unit cost that includes the insurance charge.
After you set up Purchase Elements and add & calculate the document’s elements, the Purchase Order includes your additional costs in a clear and consistent way, giving you a more accurate total cost overview.
