The Committed Cost Report – Getting it Right!

The Committed Cost Report – Getting it Right!

Last Tested with SMB Version 17

The committed cost report (6-1-12) in Master Builder is often reviewed in more detail at the end of the accounting year. This is a great report that is full of important information – but if you are not careful, it can mislead you!

The committed cost report indicates the total
dollar amount on purchase orders by job and cost code. However, even if a purchase order is marked as closed (status = 4), an individual line item will show up on the committed cost report if the line item has not been completely fulfilled. This actually happens fairly often in real-life situations where purchase orders are manually closed for any number of reasons.

This issue can lead to a substantial overstatement of committed costs.

To avoid this problem, do an audit of your closed purchase orders prior to printing your committed cost report.

To create a simple query to audit your purchase order line items, follow these steps:

1) From the 6-6-1 screen, select ‘File | Find’

2) Click to create a new query

3) Give the query a title ‘Closed PO Audit’ and click

4) Select the fields to include in the query

  1. Purchase Order: Record#
  2. Purchase Order: Order Date
  3. Purchase Order: Vendor
  4. Purchase Order: Status
  5. Purchase Order Lines: Line #
  6. Purchase Order Lines: Description
  7. Purchase Order Lines: Quantity
  8. Purchase Order Lines: To Date
  9. Purchase Order Lines: Cancelled

Then click

5) Define the selection fields

  1. Purchase Order: Status
  2. Purchase Order: Order Date
  3. Purchase Order Lines: Quantity

Set the defaults for the status to be ‘Equal’ to 4 (Closed) and the quantity to be ‘Greater or =’ to 1.

Then click .

Run the new query. For each line of all closed purchase orders, the quantity must be greater than or equal to the quantity received to date or cancelled.

Quantity <= ToDate + Cancelled

If you have a large number of closed purchase orders, you can make the comparison process much easier by transferring the results to Excel. See our post
A Method to Generate Complex Reports
for a detailed explanation of using Excel with SMB queries.

In each closed purchase order that has unfulfilled line items, edit either the ‘To Date’ (quantity received to date on the line item) or the ‘Cancelled’ (quantity cancelled on the line item) column to equal the ordered quantity.

With this audit completed, you can be assured the amount reported in your committed cost report will be accurate and informative for your year-end reporting.

Note: The audit process can be simplified further by using a SMB report that shows only the open lines on closed purchase orders. This report can be downloaded from our subscription library ”
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