freight charges unexpectedly added into a Build

square1 comp · ‎October 24, 2022

We have Quickbooks Desktop Enterprise Solutions Manufacturing and Wholesale 22.0

I recently took a close look at some of my freight charges to make sure I fully understood how they worked because the summary numbers looked wrong (they were negative).

We have a COGS line item for "freight in" for the cost of shipping component parts to our company.

We set up an Other Charge Item called "freight" and it is set to default to Cost of Goods Sold: freight.in

Then when we issue a PO that has a shipping cost, that cost is reflected under Freight, and when the item is received, the freight costs go to Cost of Goods Sold: freight.in

My question has to do with an Other Charge for "freight" showing up in a Build, and then some random number showing up as a CREDIT to my "COGS: Freight in" account upon sale.

As an example, I have an Assembly which, when completed, is mapped to my Inventory: Finished Goods account. The Bill of Materials for that Assembly has four sub-assemblies and/or items on it. The Bill of Materials does NOT include freight.

When I go to Build that Assembly, it shows the four sub-assemblies and/or items for the BOM properly. It does NOT show freight as an item on the Build.

Later, after the Finished Goods have been sold, in reviewing the Freight in account, I see a CREDIT referencing that specific Build Assembly. When I open the completed and sold Build Assembly, it now has a Freight Entry in it that I did not put there. That Freight Entry has a value that I have no idea where it came from.

I do not understand why this happened or where the value of the Freight amount credited came from.

Looked at from a global basis, when items are purchased, and their Freight Costs go into COGS, they should stay there. I see no basis for why the sale of an item should result in a Credit to this account.

Any insights?

MJoy_D · ‎October 24, 2022

I'm here to share some information about the bill of materials in QuickBooks Desktop Enterprise, @square1 comp.

Try to check the Income account that you set for the inventory assembly. That will be the account used to track sales of finished goods.

Here's how:

From the Lists menu, select Item List.
Click to open the Inventory Assembly.
Check the Income Account dropdown.
Update all the necessary information.
Select the OK button to save.

Refer to this article for more information on how to create an inventory assembly to track your bill of materials: Set up your product’s bill of materials.

You can also run the Transaction Journal Report to check the invoices or sales receipts showing your Inventory/COGS transactions which credits the Inventory Asset account and debits the COGS accounts. For more information about this report, check out this article: Understand inventory assets and cost of goods sold tracking.

In case you're still unable to find where this freight account is coming from, I suggest reaching out to our Customer Support team. They can get into your company file securely, help you find this entry and resolve it. You can check this article for more information about the different types of support we offer and their availability: Contact QuickBooks Desktop support.

Let me know if there is anything else that I can help you with your inventory. I'm always here ready to help. Have a wonderful day!

square1 comp · ‎October 24, 2022

This is not an Income account issue.

I have already set up my assembly bill of materials. That bill of materials does NOT have freight on it.

I have looked at the transaction journal report, where it shows crediting the COGS freight account.

My questions are:

- since freight is not on the BOM at all, WHY is it crediting the COGS freight account?

- Why a Credit (and not a debit) to COGS, that does not make sense?

- How was the amount that was Credited determined.

Candice C · ‎October 24, 2022

Hey there, @square1 comp.

I appreciate you coming back with some additional information about your issue.

One of our champs in the QuickBooks Community has a great answer to your situation and give more details in this thread given: Inventory.

The best route would be to consult with your accountant if you're still unsure. They'll be able to review and give you a run down of what's happening/what should be happening.

In the end, you can always get in touch with our Customer Support Team for further assistance.

Feel free to reach back out and let us know which route you decide to take and how it works out. It's my priority that you get some more insight on your problem and get it handled as quickly as possible. Have a great day!

square1 comp · ‎October 25, 2022

I know more about these details than my accountant, so consulting him does not help. Besides this seems like erratic behavior on the part of your software.

Looking at the thread you directed me to, it does not address my question as far as I can tell.

my problem is that

1) My Bill of Materials for Assemblies do NOT include "freight in". All "freight in" charges are separately accounted for in their own COGS expense account via a debit.

2) When I bring up an Assembly to Build, no "freight in" charges are shown.

3) After the Assembly has been Built and used to fulfill a Sales order, a new line item for freight in has been added to the Bill of Materials by Quickbooks.

4) The amount associated with that new line item for freight in added by Quickbooks has been Credited against the COGS account, throwing it off.

5) I can find no way of determining how Quickbooks came up with the number that was added.

square1 comp · ‎October 26, 2022

You said "Try to check the Income account that you set for the inventory assembly. That will be the account used to track sales of finished goods." I have already done that, and the income is set up to go to the correct income category.

You said "Refer to this article for more information on how to create an inventory assembly to track your bill of materials: Set up your product’s bill of materials." Been there, done that, have set up hundreds of bills of materials previously.

You said "You can also run the Transaction Journal Report to check the invoices or sales receipts showing your Inventory/COGS transactions which credits the Inventory Asset account and debits the COGS accounts." As noted in my post, I have already done that. The CREDIT against COGS Freight In shows up in this transaction report, but does not explain WHY it is there, as it should not be.

You said "In case you're still unable to find where this freight account is coming from, I suggest reaching out to our Customer Support team." Unfortunately I have found that the Customer support team is often not qualified to solve these problems. Very few of my issues have been solved by them. Most of my issues have been solved via this forum, usually by other expert users. But I will start the process.

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freight charges unexpectedly added into a Build