Cost Engine Chat Bayu and Victor 23/09/2010
Hi Bayu
bayucahyap: Hello Victor
yo: how are you?
bayucahyap: i am fine here. how about you?
yo: fine thank
can I ask some quesition ?
bayucahyap: ok
yo: in your country is legal that the inventory can be valuate with different methods ? bayucahyap: btw, to answer your questions, in our country, commonly we are using one method to perform inventory valuation thanks victor
yo: ok then you never will have product category valued other costing method
bayucahyap: yes
different method will be confusing for most of us
yo: for example the manufacturing product are valued using standard cost
bayucahyap: but, with the standard engine of ad, i know it is possible
yo: and the distribution product I use AVG inv valuation
bayucahyap: oh....
yo: I go for AD cost engine
bayucahyap: for us, actually, we using an 'fifo' to perform this tasks
ya, it is about your liberoce, is not it?
yo: but first I need analysis the business issues
yes
bayucahyap: for best practices, afaik, one method for all purposes will be suitable
yo: I am try find the best way to management coing method for organization
bayucahyap:
yo: then adempiree are out the best practice
bayucahyap: he he he
yo: now allow set this business issue
I have corporate company
bayucahyap: ya ya, understood
Enviado a la(s) 23:12 del miércoles
yo: the corporate company have manufacturing plant
and comercial organization
about are legal entity
but into the requirement they use the same customer and product data
even the same product can manufacturing a company and sell in other company
do you understand
?
bayucahyap: hmmm...
yo: in current example is Garded Word
with the organization hq
and furniture is the manufacturing company
and the common product is the pchair
so how you setting the costing?
bayucahyap: is this for hq orgs only?
yo: what is best environment or stage ?
the product ay be sell in HQ or your stores
bayucahyap: well, in our previous erp implementation (not AD), we are using FIFo costing
yo: but pchair is manufacturing in forniture org
bayucahyap: all of material sum up to the target Finished Goods
there are transfer pricing procedure
yo: ok the best practice is that for comercial organization is use Avg inv costing
and for manufacturing org use standard costing method
bayucahyap: prior this activity, we transfer our material to other org
yo: do you agree?
bayucahyap: i am not going with this approach
yo: because in my example HQ is legal entity
bayucahyap: from 'end to end' we have to use single method of inventory valuation
yo: and Forniture is legal entity
why you can use different costing method if the company are different legal entity
bayucahyap: in your case, it is okay to use different inventory valuation method
Enviado a la(s) 23:24 del miércoles
yo: yes but how you setting stage in adempiere
Enviado a la(s) 23:26 del miércoles
bayucahyap: we are using standard costing to all of our orgs
i am still check the possibility that our manufacturing modul can be utilizing fifo costing method also
yo: ok in my new cost engine
want enable this feature
bayucahyap:
Enviado a la(s) 23:28 del miércoles
yo: ok the first approach is create 2 client in the same db
the main problem that I can not shared the customer data and product data between this
bayucahyap: yes.
why not using 2 orgs?
yo: then it is discarded
the second approach I use 2 organization
but I need create 2 account schema
the first used for avg costing method
and the second using the standard method cost
it would be a good solution to increase a lot the transaction
because AD register each transaction for each account schema
in this case I will have 2 record in avg invoice for hq and other for furniture schema 1
and 2 record in standard cost for hq and other for furniture
so i have 4 record
bayucahyap: how about reconcile this trans?
Enviado a la(s) 23:36 del miércoles
yo: this complicates a lot the operation operations
this business case I get follow question
1.- Is valid enable costing method by organization?
1.- Is valid remove the costing method from account schema ?
bayucahyap: actually, my prev erp, enabled costing method by warehouse. so enable costing method by orgs is viable
and valid
yo: yes I think that right is by warehouse
bayucahyap: because all of our rm will be accounted in warehouse basis
yo: because the inventory valuation is focus your materials
bayucahyap: definetely
yo: ok this my idea
to implementart
first option
add the costing method into the Org info tab
and use this to account check that costing method use
bayucahyap: ok
yo: it now is posible because I can now run parallel cost for any org and warehouse
second option
create a new field into the warehouse window
bayucahyap: and set costing method there
yo: then I use the this field to validate how the account be register
exacly
bayucahyap: so, we have same idea
on how to implementing costing
yo: third approach
enable the capability for create 2 record in product category acct tab
this way you can define the costing method and costing level based in the category
bayucahyap: what type of 2 type records?
yo: the account definition
now you only can set single record for product category
currently can not change the organization it always is *
but I can change
bayucahyap: oh... the account will be bind to each organization, is'nt it?
yo: exacly
the accounting and overwrite the costing method
as is now
bayucahyap: i see
yo: but when you overwrite for all the org
and you change only for product category that may be out the best practice
bayucahyap: for now, i just following the standar ad implementation
yo: what do you think that is best approach
bayucahyap: and after we set the costing method, we never change the costing methods
yo: yes you will br
be
create a new product category
bayucahyap: yes
yo: and after change the category the product
before your answar me
I need say that I change the approach with the account engine
1. move the costing method field from cost element to cost type
this way you only need create a cost element called Material
and use the same cost element for multiples cost type
and I can use cost type to define the method cost for each cost type
then if I create 2 or 3 cost type
adempiere generate the cost detail for each cost type
for example AVg Inv. Cost type
abd Standard Cost Type
both use the same cost element in this case material
bayucahyap: so, we have all this valuation recorded
yes
agree
yo: exacly with this approach I implement the parallels cost
this way
bayucahyap: great victor
yo: http://adempiere.com/index.php?title=Sponsored_Development:_Libero_Cost_Engine
now I need complaint the feature the to indicate the account engine
that costing method I will use to generate the accounting fact
and is here my doubt that is best approach to use
Enviado a la(s) 23:57 del miércoles
bayucahyap: your team work is still using https://adempiere.svn.sourceforge.net/svnroot/adempiere/branches/cost_engine ?
yo: yes
I am developemtn this
bayucahyap: i see
yo: What do you think?
bayucahyap: yes, i am following this development movement
and i am support you with this devel
yo: I am implement avg cost
bayucahyap: here, my position is tester ( as for now )
and eager to join this development processes
yo: Teo and your people are implement FIFO/LIFO
but I am stop in choose the best approach
until now I think that best is set the costing type in warehouse
bayucahyap: correct
yo: and deprecate the functionality the costing method in product category
Enviado a la(s) 00:05 del jueves
bayucahyap: yes
the main problem is just about migration to the new costing engine
yo: yes because breack the back compatibility
break , but I not sure if current engine work rightly
bayucahyap: yes
just give our new engine as an option
yo: I create a new process called Generate Cost Detail
bayucahyap: with some notes, that we have no support with previous costing engine
yo: , it allow generate the cost detail and layer for any cost type and costing method
bayucahyap: yummy.....
yo: so the migration is posible because you only need remove all cost detail and regenerate
bayucahyap: ah..... you are going step forward
yo: other importnat change was that now the cost detail is generate when you create inventory transaction
and in second time the account engine generate the facts
so the history cost are separate the accounting engine
bayucahyap: wonderful features
yo: this allow that you can regenerate in batch process the cost detail and accounting fact in end period
this with the goal the fix the COGs records
bayucahyap: implemented already?
yo: yes it is ready
bayucahyap: rock!
yo: but I need now implement the costing method for organization
Enviado a la(s) 00:13 del jueves
yo: ok I share this discussion with other as Michael Judd , Susanne Calderon , Colin Croo and Steven to validate if the Warehouse Approach is the best aproach
bayucahyap: ok. thank you for count me in this discussions
yo: thank you for interchange option
yo: the unique disadvantage is that now ADempiere use Asset Account based on the product acct tab setting and not the account defined in warehouse window