A cost element is a charge on a sale beyond the price of the goods: freight, insurance, packing, a duty. It is added to a sales order or a Customer Invoice, either for the whole document or for one line, and this screen says how its amount is worked out and which accounts it posts to.
- Where
- Accounts Receivable › Cost Element › Cost Element
- Who uses it
- Finance controller, implementation consultant
- When
- At setup
What it is for
A charge either is billed to the customer (it raises what the customer owes) or is a cost you carry (it posts between two general ledger accounts). The two Account Layer fields decide which.
Every field in plain words
General
| Field | What it means | What to put |
|---|
| Cost Element | The code | Required. Must be unique. Short codes help when writing formulas: FRT, INS |
| Name | What it is called | Required. Printed on the invoice's cost element lines |
| Cost Category | The kind of charge | Required |
Posting Debit, Posting Credit
| Field | What it means | What to put |
|---|
| Account Layer (debit) | Where the debit side goes: the customer's ledger or a general ledger account | Customer ledger posts to the customer's receivable account. General ledger unlocks Debit Account and makes it mandatory |
| Debit Account | The general ledger account debited | Only for the general ledger layer |
| Account Layer (credit) | Where the credit side goes | Same choice |
| Credit Account | The general ledger account credited | Only for the general ledger layer. Must differ from Debit Account when both sides are general ledger |
A charge billed to the customer: debit layer customer ledger, credit layer general ledger with a revenue or recovery account.
Tax
| Field | What it means |
|---|
| Tax Group | The tax group of the charge. A charge billed to the customer, with a tax zone and tax group on its line, gets its own tax lines on the invoice |
Basic Data
| Field | What it means | What to put |
|---|
| Value Drive From | What the charge is a percentage of | Required. The net amount, the assessable amount, or a formula |
| Value Drive Formula | The formula, when Value Drive From is a formula | Built with the formula editor from NET, ASM, other cost element codes, numbers, + - * / and brackets. Cannot refer to itself |
| Value Drive From Percentage | The percentage applied | Required, more than 0 |
| Currency | The charge's currency | Optional. A charge in another currency is converted at the invoice date's rate |
| Default Allocation Base | How the charge is spread when it is on the whole document | Pick from the list |
| For Assessable Calculation | The charge counts towards the assessable value | Read by purchasing. No receivables or sales screen reads it |
- Group the cost elements a customer should get automatically with Cost Element Group, and add them to sales lines automatically with Auto Cost Elements.
- When the company sends invoices to the tax authority's digital invoicing, a charge billed to the customer stops the invoice from being posted. See Customer Invoice.
Scenarios
- Freight billed at 2% of the net amount. Value Drive From net amount, percentage 2, debit customer ledger, credit general ledger freight recovery.
- Insurance at 1% of goods plus freight. Value Drive From formula, formula NET + FRT, percentage 1.
What it is connected to
If something looks wrong
- "Value Drive From cannot be empty" / "Value Drive From Percentage cannot be smaller then or equal to zero". Fill both.
- "Formula cannot be empty when Value Drive From is Formula". Build the formula.
- "Formula cannot refer to the Cost Element itself" / "Formula refers to unknown Cost Element(s)". Fix the codes in the formula.
- "Cannot save General Ledger Debit Credit same account". Use two different accounts.
- "Cost Element Cannot be Duplicate". The code exists.
- "Cost Element '...' is not properly configured." on an invoice. The cost element's accounts are incomplete. Check both layers and accounts.