A/R Order pricing

Question

If our warehouse place an order for a product and the price is wrong (or wrongly estimated) and we raise an A/R Invoice BEFORE the Order arrives in our Accounts Dept than the charges to COGS in our accounts is incorrect because the programme picks up the information from the order( which has the wrong price)
However, when the Order is Converted to an A/R invoice, the Accounts Dept correct the Cost figure but SAP does not make any adjustment in the COGS - is this wrong or am I missing something?
My other question is that in the warehouse we cannot expect them to understand Accounts, so if the Order is set on the wrong price list (ie sales Price List instead of Costs) than the Order and the Accounts will be charged with the wrong COST.
I wonder if COGS should be charged from information that should come from a warehouse operation (the order) and when the Accounts operation takes place ie the conversion to A/R invoice, than SAP ingnores the correction made to the Costs.
Sorry about this long story but it has happened to us and we do not understand the logic behind this procedure.
Thank you
Robert

Answer 1

The charge to the Accounts to COGS is done at the incorrect price (of course most of the time this price should be correct but it can also be incorrect, because is not based on a real invoice) from the Cost determined in the Order. However, when the AP Invoice is received at a different price, there is no adjustment in the Accounts for the wrong amount charged in the first place. I have checked this out and indeed the charges in the Accounts COGS is incorrect.
Although one can create manual adjustments with adjustment Journals, I think this correction should be automatic since the Estimated Cost price charged in the first place is different from the Actual charged in the A/R Invoice.
The point is that one should make charges to the COGS on actual Information and not an assumption. The present procedure relies on the Order Estimated Cost and it does NOT adjust the Cost, according to the real Invoice.
Something is not right with the Cost Charge procedure which comes from a non accounting Document (the Order). In fact the legal definition of the Purchase tax Point is where a company receives an A/R Invoice and at this stage all the enrties into the accounts should occur, crediting the Creditors and Debiting the Costs. If however SAP allowes this entry to be carried out BEFORE the receipt of the A/R Invoice, this is fine as long as it adjusts the COST already charged to COGS.
In summary, overcharging or underchanging the COGS at the Order Level is not a good idea and if it has to remain this way, than an automatic adjustment would be required.
thank you
Robert
PS SAP cannot ignore the actual Cost Price paid as per the A/R invoice and at the moment, in the scenario i am describing, the only cost charged to COGS is the price from the Purchase Order and it totally ignores the price paid according to the Purchase Invoice - please check this out.
Edited by: Robert Czik on Apr 8, 2008 7:57 PM