You can control how to bill customers for the individual shipments that make up a lot item order using one of the following invoicing methods:
Once you reconcile the lot item shipment, the system generates the customer's invoice the next time you print invoices.
When you select the Advance Billing Factor (ABF) invoicing method, the system calculates your customers' invoices for lot item shipments based on a factor defined during lot billing setup. This is the default invoicing method, and can be used with most lot items.
The ABF calculates suggested customer invoice amounts for each shipment by dividing the open lot cost by the vendor invoice amount, multiplying that amount by the lot price, and multiplying the total by the ABF. This is easier than pricing each individual material, and you can still override the calculated price when needed.
Using an ABF greater than 1.0 improves cash flow at the beginning of the lot item order life cycle, whereas an ABF of less than 1.0 improves cash flow at the end of the lot item order life cycle. The default ABF value is defined in control maintenance, but you can override it at any time using the Lot Item Status window.
Use the flat-rate invoicing method to specify individual invoice amounts during A/P reconciliation. The system bills the customer the exact amount (flat rate) you specify, instead of using a system-calculated amount. Flat-rate invoicing overrides ABF invoicing, but cannot be used in conjunction with the material detail pricing method.
You can charge a flat rate on any ABF invoice at any time during the lot order's life cycle. For example, you can override the calculated amount to bill more on the first invoice, or round up a later invoice from $443.18 to $450.00.
To enter a flat rate, specify the amount in the A/R Billed field on the A/P Open Lot Item window. The system monitors the total amount billed and will prevent you from billing your customer more than the agreed-upon total lot price.
Use material detail pricing to specify the price and cost for each material attached to the lot item. The system bases customer invoicing on the extended prices from the reconciled shipments. Because itemized pricing requires considerable effort to maintain, you should use this method only when market conditions or customers require it. If you intend to use this method, you must enable it before the system invoices the customer for the first shipment.
When you reconcile shipments, the system invoices the customer using the prices you specified. You can override the customer's price or vendor's cost only on the Lot Item Material Detail window.
Even if you decide not to use material detail pricing as your primary invoicing method, you may want to itemize some or all of your prices and costs. See Itemized Material Price and Cost Concepts for more information.
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