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Logistic costs distribution

Within the procurement process of a company, different aspects are involved that must be considered for its correct control and management.

A purchase involves logistical costs, which are the expenses incurred to place the product either local or imported, in the possession of the company, such as freight, insurance, duties and taxes, transport, hauling, storage, among others.

The expenses involved in this procurement process are transformed into costs as they are incorporated into a company’s operating process. Therefore, knowing the real cost is of great importance for making decisions and perform financial analyses in terms of measuring yields, as well as operational analyses for the correct valuation of inventories.

The Problem

Companies have different approaches in term of cost distribution which leads to incorrect accounting records. Regardless of the costing methodology, an improper allocation of costs directly affects the value assigned to the product.

The Implications

Not being able to rely on your accounting records may cause a wrong decision of strategies and does not reflect the real financial situation of the company.

The Solution

With LOVIS EOS companies can integrate all those expenses that are incurred in getting the goods to their warehouses, using the distribution factors that best suit their operation. Examples of these distribution factors are volume, weight, value of the goods, etc. or combination of them using formulas editable by the end users.

The Benefits

LOVIS EOS performs the proper distribution in such a way as to affect proportionately the product that is consumed without over-costing any other, in this way, having the appropriate costs per unit will help to improve decision-making.

This leads to the correct record of costs and valuation of inventories, in addition to giving companies the ability to carry out transactions in real time and thus avoid reclassifications or mismanagement.

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