Powder Coating

Here we have an example on how to deal with enhanced value to a product.

One example is Powder coating, we buy an item from a supplier and then send it out for powder coating which increases the value of the stock item.  It generally comes back as a new item.

The process will have the following benefits:

1. Control which items are sent for Powder Coating
2. Know who has the items
3. Shows the value powder coating

The first thing we need to do is create an internal Creditor account for powder coating.

If you have multiple suppliers who handle enhanced value to a product, then it is best to create an internal creditor account for each.  This way one knows which supplier has the stock that was sent for powder coating.

Make this creditor a Non VAT / GST supplier

Setup the linked supplier to update cost

Go to the item to setup a supplier cost link.

This means that when the stock that is purchased from the actual supplier, updates the internal supplier with the cost.

When sending the stock to the Powder coating supplier for this item, it will bring the correct cost in, which will always be updated.

---

Sending the stock to the powder coating supplier

Create a Stock Return Document of the stock that will be sent to the supplier.

Ensure that your cost of the item is the same value that you purchased it at

Process and print a Stock Return delivery note.

Delivery note will not show value to Powder coating supplier, but shows items sent to them.

Delivery note to send with stock

 

The supplier will show a negative value, which tells us that the Powder coating company has our stock.

 

Stock movement reflects inwards and outwards to powder coating

 

---

Receiving stock from Powder Coating

When receiving the stock back from the Powder coater.

Select the new item with the same cost as what you sent it out on.

By doing this the internal Powder coating supplier will equal zero.

This can be run from the PO or GRV documents

 

 

Enter the Powder coating actual company in the importation split.

If the supplier charges VAT / GST, select the correct Tax type

 

This will add the additional cost to the item, thus increasing the value of the stock item.

 

After processing the following will happen

1. Powder coating internal company is balanced out
2. New stock comes in with increased value
3. Supplier who did powder coating is due for the value

New stock comes in at correct pricing

 

The supplier is owed the correct amount for powder coating