Itemized costing is a powerful and detailed mechanism for estimating costs for a particular trade and across your entire operation. Tracking each individual cost-type (e.g. freight, insurance, etc.) on the trade allows precise P&L calculations, and also gives greater insight into the accuracy of your trading team's operational assumptions.
Itemized costing is an optional setting as CATS provides a number of different techniques to estimate costs. To enable itemized costing, you'll need to modify the System Settings.
Each individual costing record on the contract item is tied to a particular cost code. As such, it is important to set up your cost codes so that they capture the level of costing detail that you are interested in. These codes allow the correlation of the trader's estimate of the costs accrued by a trade with the actual charges applied from a vendor's invoice.
For a full discussion of cost codes and how to work with them, see the Cost Codes file.
The entered cost of an individual costing item reflects the estimated (or, if you prefer, accrued) cost of that item. CATS will use this value to calculate an exdock value for the trade. For many different types of costs (e.g. freight charges), the actual charges are not known until much later when you receive the bill from your vendor.
Estimating the costs of bringing material to market is an essential part of evaluating the quality of any trade. Traders need to be using accurate information to make the best decisions. Using itemized costing in CATS allows traders and their managers to review these vital estimates and compare them against the actual costs incurred for each trade, origin, type of material, etc.
When CATS is configured to use itemized costings, any costings for an item will be display in a chooser grid on the contract item page.
From this list you can quickly see which individual costings that have been entered for this trade, the total cost of those entries, and the total amount charged (on a vendor invoice, see below) against each entry.
The “Tran” menu on the contract item screen allows you to view/edit and configure the costing entries for the current trade.
The costing header record provides a place to specify specific information about a particular Grade, Origin and Destination. This is commonly used to set the transit days and other details from which CATS can calculate the total price of certain costs (e.g. insurance).
CATS provides an automatic mechanism to add costing items to a trade based on the product, the contract terms, the country, the origin port, and the destination. A contract item with matching the cost analysis details will automatically pull in the itemized costings and header details for that cost analysis as configured.
For a full discussion of how to configure cost analysis records, see Cost Analysis.
When adding a contract, there's an option to copy the costing records as well. For contracts that have similar costings this can save a significant amount of data entry.
You can view the itemized costs by selecting Tran > Scan Costs from the contract item screen's menu. This will display all the costing items for the current trade in a grid layout.
You can use this grid to quickly review and edit the costs. You can also add or remove costs.
After you make your changes CATS will recalculate the costing totals and offer to apply the new costs to the current trade's exdock calculation.
You can add itemized costs to the current trade from the Scan Costs screen. From the menu select Add.
Enter the cost code for the new item, then pick Apply.
Then you can enter the details for the new costing record. Enter the rate and the way the cost will be calculated (per Lb, KG, points, percentage, etc.). Pick Apply to continue.
Here are the fields and a brief description for each field on a cost:
You can edit an itemized costing record for the current trade in a number of ways.
Double-click on the item on the contract item screen.
Change the values directly on the Scan Costs grid.
Select Edit from the Scan Costs menu.
After you have changed all of the costs, you can exit the scan costs area.
Calculate/print progress screen will show.
CATS may prompt you to update the transportation costs associated with this item. Press Yes to continue. Transportation costs will be updated.
CATS uses a special type of invoice, called a Vendor Invoice, to track the payment of costs.
To create a vendor invoice:
The vendor invoice screen functions just like any other invoice in CATS. The main difference between a vendor invoice and a purchase is that we will be creating the invoice items manually (rather than selecting inventory).
For each costing record we want to add to this payable we need an invoice item.
To create a new invoice item:
Applyto create the new item.
Applyto save your changes.
You can continue to enter items as necessary. For example, you may want your invoice to match your vendor's bill.
Once you have all the charges entered, print the invoice and review it to ensure that all the entries are correct. Finally, if the invoice is correct, you can post the invoice (as an option after you print).
Posting the invoice will apply the charges against individual costing entries on each contract item selected for the invoice. If the contract item already has an entry, the charges will be added, if not a new costing entry will be created for that item. On the contract item screen you can see the total amount that has been booked against each costing record.
Additionally, posting the invoice will book the vendor payable into the general ledger.
CATS provides reports that allow you to review your inventory and see what costs have been estimated, what costs were paid, and what costs are accrued.