Stock Detail Options: COS Excluded
Table Of Contents
Introduction
The COS Excluded Item option allows certain stock items to be excluded from Cost of Sales (COS) and stock nominal postings.
When this option is enabled, the stock value of the item is not posted to the stock nominal accounts, and the item's margin is not included in Cost of Sales calculations.
This functionality is primarily intended for non-stock purchases and expense-related items that need to be processed through Purchasing but should not affect stock valuation.
Important: We strongly recommend using the SP Ledger for entering non-stock expenses such as utility bills wherever possible.
Typical Uses for COS Excluded Items
Examples of where COS Excluded Items may be appropriate include:
- Expense-related Purchase Orders that are not linked to physical stock, such as gas or electricity bills.
- Purchase Orders that contain a mixture of stock and non-stock items.
- Delivery charges that are processed through Purchasing but are not associated with stock items.
Before You Begin
Before using the COS Excluded Item option, you must create:
- A nominal account for the expense category.
- A stock item linked to that nominal account.
Step 1: Create a Nominal Account
Create a new nominal account following the instructions in:
Configure the nominal account as follows:
| Setting | Value |
|---|---|
| Account Type | Stock Item |
| System Type | Purchase or Expense |
Note: A separate nominal account should be created for each expense type, such as electricity, gas or postage.
Step 2: Create a COS Excluded Stock Item
Create a new stock item following:
Although an existing stock item can be modified, creating a dedicated stock item for each expense type is recommended.
Configure the Properties Tab
- Open the [ Stock | Detail | Properties ] tab.
- Set the PNominal field to the nominal account created for the expense.
Example
| Expense Type | PNominal |
|---|---|
| Electricity | Electricity Nominal |
| Gas | Gas Nominal |
| Postage | Postage Nominal |
Configure the Options Tab
- Open the [ Stock | Detail | Options ] tab.
- Configure the following settings:
| Option | Setting |
|---|---|
| COS Excluded Item | Ticked |
| Stock Controlled | Unticked |
Save the Stock Item
Press Ctrl+S or click Save.
The stock item is now configured as a COS Excluded Item.
How COS Excluded Items Work
When a COS Excluded Item is used:
- The stock value is not posted to stock nominal accounts.
- The stock value is not posted to Cost of Sales when sold.
- Product margin is not calculated.
- The item's PNominal controls which nominal account is posted to during purchasing.
This allows expense items to be processed through Purchasing without affecting stock valuations.
Important Notes
PNominal Is Mandatory
The stock item's PNominal field must be populated before the COS Excluded option can be used successfully.
Without a PNominal, Khaos Control will not know which nominal account should receive the purchase postings.
Stock Control Must Be Disabled
COS Excluded Items should be configured as:
- COS Excluded Item = Ticked
- Stock Controlled = Unticked
This prevents the item from affecting stock holdings and stock valuation.
Margin Reporting
Because no Cost of Sales posting occurs:
- Margin calculations are not generated.
- Stock value reporting is unaffected by the item.
Additional Information
COS Excluded Items provide a way to process expense-based purchases through Purchasing while keeping stock accounting accurate.
Typical examples include:
- Electricity bills
- Gas bills
- Water charges
- Delivery costs
- Other operating expenses
However, where possible, non-stock expenses should be entered through the SP Ledger rather than Purchasing.
Using dedicated COS Excluded stock items ensures expenditure is posted to the correct nominal account without creating unwanted stock or Cost of Sales transactions.