Processing Duty Transactions

Process duty transactions and movements, including the correct postings and document flows.

Bevica will let you manage your inventory that contains duty controlled items. Once that duty management setup is completed you will be able to integrate Duty Paid / Duty Free duty control into all stock movements, recording accurate costs and availability.

All item related transactions (Sales, Purchase, Transfer, Assembly and Item Journals) are set as either Duty Free or Duty Paid using the systems ‘Variant Code’. This governs how the stock is managed, when moving stock between statuses or duty is applied.

When applicable, Bevica will automatically replenish inventory between duty status.

Prerequisites

All setup required for Purchases, Sales, Finance and Inventory is completed.

Good understanding of Item Charges and their posting.

Duty setup completed.

Dutiable Items setup.

Restrictions / Rules for duty Controlled movements

• Item Variants cannot be used for any purpose other than Duty status.
• A Duty Paid movement (e.g. Sales Order) has access to both Duty Free and Duty Paid inventory.
• A Duty Free movement (e.g. Sales Order) has access to only Duty Free inventory.
• When a Duty Paid Sale is posted, Bevica will attempt to fulfil stock from Duty Paid first before replenishing from Duty Free.
• Duty is only replenished from Duty Free to Duty Paid.
• Bevica cannot replenish to Duty Paid where a single unit has a mix of fiscal codes, i.e. a case with spirits and wine.
• Variants on sales and purchase transaction lines (e.g. Sales Order) must match the Duty Status on the transaction header.

Duty Scenario in Bevica

Scenario

1. We have 10 bottles in Duty Paid status, 100 bottles in Location BLUE in a Duty Free status.
2. We place a Duty Paid Sales Order for 25 bottles.

Bevica's Processes

1. On posting the sales order the existing 10 bottles in Duty Paid are applied to the sale.
2. The remaining required quantity, 15 bottles, is replenished from Duty Free to Duty Paid.
3. That will increase the cost of the replenished 15 bottles in Duty Paid by the value of duty, prior to shipping and invoicing the order.

To be able to track the above changes, the following records are created:

• Item Ledger Entries (ILE).

  1. A negative ‘Transfer’ ILE with Variant code of Duty Free for 25 bottles
  2. A positive ‘Transfer’ ILE with Variant code of Duty Paid for 25 bottles.
  3. The positive ILE ’Cost Amount (Actual)’ field will increase by the duty value.
  4. A negative ‘Sale’ ILE shipping the goods to the Customer, this is applied to the 10 bottles originally held in Duty Paid plus the newly replenished 15 bottles.
  5. The original 100 bottles Duty Free have now been reduced to 85.
• Value Entry

  1. The positive ‘Transfer’ ILE (mentioned above) will have itself created a Value Entry using the DUTY item charge.
• Duty Ledger Entry

  1. Whenever there is a replenishment from one duty status to another Bevica creates a Duty Ledger Entry record. This holds all the point in time information used to calculate the duty amount.

Manual Duty Replenishment - Reclassification Journals

Inventory can be replenished between Duty Status’s manually if necessary. In case you need this functionality, this is what you need to do:

1. In the search button, type Reclassification Journal.
2. Enter a line for the Item No., Location, Unit of Measure and Quantity, that needs to be moved.
3. Populate the Variant Code field (existing duty status) and New Variant Code (new duty status).
4. Populate the Applies-to Entry number to select a specific piece of stock.
5. On posting this will create a negative and positive Item Ledger Entries with associated records and a Duty Ledger Entry.

The Reclassification Journal can also be used to move stock from Duty Paid to Duty Free

Duty Ledger Entry and Duty Reconciliation

The Duty Ledger Entry page records each clearance/replenishment from Duty Free to Duty Paid. This is usually generated from a Duty Paid Sales Order where the stock is being held Duty Free, but may also originate from a Transfer Order or Reclassification Journal. The list can be used to check duty calculations and reconcile against details provided by your third party warehouse. The Created Date field can be used as the basis for an Analysis Mode pivot report.