Lot Settlement

While the cost of purchased goods is typically known at the moment the purchase order is placed, there are some scenarios in which this is not possible.  This is particularly true in cases where a company resells another vendor's items, then pays the vendor based on the amount for which the items were sold. For example, Company A buys an item from Company B, then sells this item to its customers. Once Company A sells the item, it pays Company B based on the sales amount, after first taking a 10% commission. So if Company A sells the item for $100, it pays Company B $90.

Food Manufacturing & Distribution has some tools that can assist you in calculating an item's purchase cost based on sales price. It is important to note that an item must be lot tracked in order to perform such calculations. This is because a lot number is needed to establish the relationship between specific items and vendors. If items are not lot controlled, there is no way to tell if the item on a sales order was purchased from a particular vendor.

To View sales information about item lots, such as unit prices, quantities sold, and gross margins, see How to: View Lot Summary Information