Almost all of implementations have the Misc charges and Auto misc charges used in the AR and AP. Recently , I noticed a strange behaviour when i was using this feature in one of the implementation. This is related to the Misc charges with category “Percent”. We will take an example of Misc charge on a purchase transaction to understand the issue
Consider that there is an item on which a 5 % duty is applicable on the net amount of the purchase. Therefore, consultants would like to utilize the ‘Auto misc charges’ feature for mapping this business requirement.
Let’s first create a Misc charge code e.g. “Duty’ as shown in the following screen shot:
The Misc charge has been created with the following posting setup:
i.e. the cost of the misc charge is to be loaded on the inventory value and offset to a Misc charge suspense account.
You may also notice that the Company currency is USD in the environment in which this simulation is being done. Consider that a Purchase order is raised in EUR on a vendor
Att this stage , if the Duty was configured in the Auto misc charges then it would flow on the lines else we can manually configure a misc charge for the purchase lines that duty of 5% payable in USD ( as we are buying from an overseas vendor in EUR but would pay ‘duty” to customs in USD) . The sales line misc charge would be as follows
Now , when we invoice update the purchase order and see the voucher of the invoice posting
The misc charge amount got calculated 5% of EUR 10,000 as USD 500. Therefore for those consultants/users who rightly disagree with this logic of calculation , the setup and configuration should be done with the above in mind.
To understand the effect for comparison purpose consider that the same item is bought from a vendor in India and the order is placed in INR. The exchange rate conversion for INR is 1 EUR = INR 80 . Therefore the Purchase order is placed for 5000*80 = INR 400,000.00 . The purchase line is also having the 5% duty as a misc charge .
Follow the steps for processing purchase order and invoice it . Check the invoice and the voucher:
Pls notice that this time the duty paid is USD 2000.00 as against the previous example of USD 500.00 (even that was not correct) .
Can one believe that for the same value of the item in the company currency just by changing the currency of the purchase order we could have ended up paying 4 time the cost of the item as duty?
Apparently Microsoft’s development team is working on this bug and we may hear some fix on the above.
Imparted from Here