Dynamics 365 Business Central: Landed Cost

Dynamics 365 Business Central: Adding CC Charge to Item

Alright guys we're going to keep going on item charges, do one more video on that. We got a great question from Cory yesterday and so today we're going to answer that question with the video. 

The question was, 
on the sales side can we use item charges for credit card charges?  

Of course, with item charges you have the item and then you have ILE which are the item ledger entries and underneath that you have the value entries, all right, so this is the structure. If we have a sale, so let's say for example this is a coffee mug that's the item and so we have a sale for let's say it's 5 at $4 for $20 and what we can do then is, add an item charge so that would be like let's say a credit card charge, let's say that's just quantity one for $5 total. 

That means that the total unit cost. becomes $25, because it adds the 5x4 and 1x5 into that to make it into $25 and that can happen after the fact or it can happen on the sales order the thing about this though is it increases the price, we're talking about sales not the cost. The thing about this it that the price goes up, which means that your revenue goes up for this item, so whenever you run a report on this item, the item will show up with a $25 price for this transaction. Your unit price effectively goes up by $1 into $5 and that is because of a credit card charge that lifted the value of the item up, so whether you want to use the items or not-here, is sort of up to you, if that is okay, and you'd want to incorporate all of the charges into the price of the item then that's fine.  

The negative about that is that, let's say for example, the credit card charge cost comes in, against this fee that you charge the item, so where are you going to put the cost? Ideally, you would want the credit card charge to go into a separate account and then the cost to go into a separate account and you can sort of match out the cost to the price, ideally, or maybe not. Maybe you just want to apply the cost to also the sale and so it reduces the unit price of the item down and you're left with basically the profit of the item charge inside the item ledger entries, inside your revenue for the item. 

I know it gets a little bit crazy, I go through this in the video as well I do a little screen sharing a little bit, I think if it's not a huge amount the charge that’s in here and doesn't have a major effect on the item itself, it might make sense to have it just go to its own GL account and reconcile it in the GL account. I'm going to show you how would work if you did it as my own charge, by the way very good question, thanks for the comment, Let's look at the screen share. 

Okay, in the system, what we're going to do is create a sales order and we'll just pick the Adatum corporation and go ahead and sell a coffee mug. So, we'll just do five, let's pick a good location here, let's do the east location. The question was, can we now attach a fee to this item, like a credit card fee that we're going to charge the customer? and the answer is yes. We can do that with item charges, let me just show you how that would work. 

If I go in here, and in the same order, I am going to add an item charge and, in this case, it's going to be, I'll use sales allowance here, but maybe not most appropriate title, just call it a credit card charge, quality is going to be one. Let's say the unit price we're charging an extra $5 for a credit card fee. What we want to do here is apply the charge to the item over here, so I could do that by going in to line, item charge assignment related information and then I can just go ahead and suggest, close. Now it's applied, I guess the only issue with this, is that you have to do this application and there is a way to code so that it automatically applies it, but it gets a little tricky because if you want it always to apply to all lines that's great, but if you only want to apply to some lines, then doing this automatically can get a little hairy. 

The effect of posting this is really nice so I'm going to show you that I'm just going to go ahead and hit process and actually posting here and post and shipping invoice to get this out, and remember I'm selling five coffee mugs and I am adding a charge on top of that for five dollars, I now want to see how that looks in the item list on the item transactions, so I'll get into items, go into my coffee mug, I can just see here and in to navigate history entries, I think I get it from the list as well but let's just do it like this. 

It opened, so now look at this sale, you can see that the sales shipment for five, sales amount is $25 so we sold for $20 but it added another $5 for the credit card charge, and you can see here that it actually breaks that up. I could have posted this charge into a different account of course, but when you look at this, you're basically saying our sales amount for this was $25, the means that I am actually putting the charge into the item. Basically, saying the item is more expensive, and you have to kind of think to yourself, is that realistic? do I want to see my revenue line for the item go up because of a credit card charge? or do I want to see the credit card charges separately? So, it's an evaluation you must make, you know, as far as looking at your chart of accounts and your GLs your reports. 

In some reasoning that might be fine, but if you're doing that, then you have to probably think about the cost, so if the credit card cost comes from the credit one company, are you then going to apply that also to these shipments to get a final number for the item? you can do that as well, then you have a perfect cost for the item. If it's a very small amount, it might be too much of a headache to do all this and it might be just easier to do it until GL account so it's up to you.