Maximo Secrets

A site dedicated to Maximo containing over 350 articles, podcast episodes and YouTube videos, updated weekly.

Invoices – Allocate Services (Part 1) – Storeroom Items

Contents

The Allocate Services action in the Invoices application is used to distribute the cost of freight or other service charges across the lines of the Purchase Order. There is more functionality than just the single action, and having already written 35 pages I have decided to split the article into five parts:

I will create a summary in Part 5 and pull together some issues found and the IBM Ideas that have been raised.

Allocate Services on a Storeroom Purchase

In this first part we will show how to use the Allocate Service action on storeroom purchases, and we’ll then trace the financial transactions that have occurred. We will spread a freight cost across other purchased items.

To illustrate the change to inventory average cost, I will create some new items and add them to the CENTRAL storeroom:

Item Master

In the Item Master application we have created five new items and from the List tab we use the action Add Items to Storeroom, the dialog shown. Items will be added to the BEDFORD-CENTRAL storeroom.
Item Master – Add Items to Storeroom

In the Item Master application, I have created four new items and from the List tab I am using the action Add Items to Storeroom. In the initial dialog that opened I selected the BEDFORD-CENTRAL storeroom and then I adjusted the Unit Cost for each item.

Also from the List Tab we can use the Change Status action to make all five items Active. We set Roll New Status to Organizations and Inventory to make the items active in the BEDFORD-CENTRAL storeroom.
Item Master – Change Status from List tab

From the List tab I can also use the Change Status action, and this will change status on all items in the selected set. The New Status is Active, and I have selected – Roll New Status to Organizations and Inventory.

This has changed status to ACTIVE at the Item Master level, at the Item-Organization level and in the BEDFORD-CENTRAL storeroom where all four items exist.

Purchase Orders

In the Purchase Orders application the four items are added as PO lines to the BEDFORD-CENTRAL storeroom.
Purchase Orders – PO Lines

I have created a PO against Vendor BALSTON with four PO lines, one for each item with the storeroom CENTRAL. The Unit Cost came from the storeroom, and the Quantity has been set to conveniently create round numbers for the Line Costs and a net total for the PO of $1000. The Total Cost in this screenshot is the Gross cost and includes Total Tax of $50.00.

I’ve now approved the PO; its status has moved from the default of WAPPR to APPR.

Notice that I did not include a freight charge on the purchase order, you might know that a freight charge is going to apply, but you may not know the actual charge. We’ll see that you can add services to an invoice without creating a service receipt, there is a setting to allow a two-way match (PO-Invoice), or a three-way match (PO-Receipt-Invoice) which I will show you later.

Receiving

After PO Approval the Receiving application is used and on the Material Receipts tab the action Select Ordered Items is used. We will receive the whole Quantity Ordered for each item.
Receiving – Material Receipts – Select Ordered Items

In the Receiving application and Material Receipts tab, I selected PO 1099 and used the Material Receipts table action Selected Ordered Items. I have selected all four PO lines and kept the Quantity Due values before using the OK button.

After closing the dialog with the blue OK button the four item receipts are shown, each has an Inspection Status of COMP (complete), no inspection was required for the four items. The Issue Type is RECEIPT. The Receipt Status on the Purchase Order has now been changed to COMPLETE.
Receiving – Material Receipts – Received Items

All four receipts have been copied to the Material Receipts table, and their Inspection Status is set to COMP (Completed). After save the PO Receipts status is set to COMPLETE as the quantities for all lines on the PO have now been received.

We are now ready to Invoice and see how the Allocate Services action works.

Invoices

On the Invoices application we reference the Purchase Order on the invoice header. It is possible for an invoice to reference multiple POs by referencing the PO on the Invoice Lines.
Invoices – Using the PO on the invoice header

I’ve created a new Invoice and in the PO Details selected PO 1099. The initial invoice status is ENTERED, and the default Type is INVOICE.

There is a Costs section on the Invoice tab if you scroll vertically down, this is where you can enter the Pretax Total, Total Tax and Invoice Total. They default to the uninvoiced costs of the purchase order.

On the Invoice Lines tab we use the table window action Copy PO Lines and select all four PO Lines.
Invoices – Invoice Lines – Copy PO Lines

On the Invoice Lines tab there is a table action Copy PO Lines for the Invoice Lines table window. There are three tabs and on the PO Lines tab I have selected all four PO Lines and then used the OK button.

After using the blue OK button the four Invoice Lines have been created, one for each item and for the quantities referenced on the Purchase Order.
Invoices – Invoice Lines – Received Items

The Uninvoiced Quantities for each item are transferred to the Invoice Lines table window. I have now saved those records.

If you used the Allocate Service action now you would get the error message – BMXAA1997E – There are no invoice lines, whose prorate service flag is true. We haven’t added a service line to the invoice.

We need to create a new invoice line for a freight charge which will be allocated over the other PO lines. We’ll just go and see how this is set up in the Service Items application.

Service Items

On the Service Items application there is a FREIGHT service item which we have marked as Prorate. Service Items are also known as Standard Services.
Service Items – Creating a Standard Service for FREIGHT with Prorate set

The Service Items application will be found in the Inventory module, but it is not a type of item that can be held in a storeroom. There is a FREIGHT item in the standard MAXDEMO database which we will use. I’ve set the Prorate checkbox, this is a default for the PO line and Invoice line. The status must be ACTIVE at the Item and Item/Organization levels for the service item to be used.

Service Items are also commonly referenced as Standard Services.

Invoices – Allocate Services

Back in the Invoices application we have added a fifth Invoice Line for the FREIGHT Standard Service. The Prorate Service field is set, defaulted from the Service Item.
Invoices – Invoice Lines with FREIGHT Standard Service (top)

I’ve added a new invoice line to the invoice created earlier and used the invoice Line Type of Standard Service. I’ve selected the Service Item FREIGHT. Notice the Prorate Service field is set; it was copied from the Service Item. The field above it, Prorated, is not set.

Scrolling vertically downwards the Line Cost for the FREIGHT charge is $300, the Prorated Cost is $0 and the Loaded Cost, the sum of these two fields is $300. Notice in the Related Records section while the PO is referenced there is no PO Line, Services can be added without there being a corresponding PO line. We are now ready to use the Allocate Service action.
Invoices – Invoice Lines with FREIGHT Standard Service (bottom)

I’ve scrolled down in the Invoice Line details, the Quantity is 1 and the Unit Cost is 300.00, the freight charge found on the Invoice. Notice that while the Related Records section shows PO 1099 the PO Line is null. You do not need to have added a PO Line for freight charges to add freight costs to an invoice and allocate that charge across other PO lines.

Notice also in the second column of fields the Loaded Cost is 300.00 and the Prorated Cost is 0.00. 

The Allocate Services action shows two table windows. The Services to Allocate (top) are the Standard Services with Prorate Service set. The Lines to Allocate (bottom) are all the other invoice lines. There are two fields at the bottom left providing the totals for each table. There are three buttons, a blue Prorate on the right, OK on the left and Cancel.
Invoices – Allocate Services action

When you use the Allocate Services action a dialog opens with two table windows and the help text:

The Services to Allocate table displays lines from the invoice that have the Prorate Service? checkbox selected. To select lines you want to allocate, select the checkbox on each line. To select all rows, select the checkbox on the heading. The Lines to Allocate table displays material and service lines from the invoice whose Prorate Service? box is not checked. Select lines that will receive the cost from the Services to Allocate table by checking one or more rows; to select all rows, check the box on the header. Use this table to allocate the selected services automatically and/or edit the amounts to allocate manually. The Services to Allocate table displays all services to be allocated. The Lines to Allocate table table displays the lines to receive the costs from the services to be prorated.

In short then, the top table window is the service lines to be prorated, and the bottom table window provides the result when you use the Prorate button. Instead of using the Prorate button you can manually decide how you wish to prorate the amount from the top table window, in this example the $300 freight cost.

We have selected the FREIGHT Standard Service in the Services to Allocate table, and selected the four items in the Lines to Allocate table. We will now use the blue Prorate button.
Invoices – Allocate Services action with rows selected before Prorate

I’ve selected the FREIGHT record in the Service to Allocate table, and I’ve selected all records in the Lines to Allocate table and now I’ll use the Prorate button. Notice the Total Services Allocated is currently 0.00.

After using the Prorate button the FREIGHT Standard Service is now marked as being Prorated. Its $300 has been allocated across the four other invoice lines using the Line Cost as the basis for determining the Prorated Cost. The two totals are now equal and we can use the OK button to save the service allocation and close the dialog.
Invoices – Allocate Services action with rows selected after Prorate

The FREIGHT item in the Services to Allocate table now shows it has been Prorated. The Prorate button has divided the $300 among the four items based on the Line Cost.

The dialog allows you a lot of flexibility, you do not need to allocate the service over all lines or to base the allocation on a direct proportion of the cost of each line. We will see some other examples of this in parts 3 and 4.

The Total Services Allocated is now equal to the Total Services to Allocate and we can now use the OK button and the changes will be saved.

On Invoice Line 1 the Line Cost was $300 and the Prorated Cost is $90, and the Loaded Cost the sum of the two is $390. The net total for the Invoice excluding the Standard Service was conveniently $1000, the Prorated Cost is 30% of the Prorated total of $300.
Invoices – Invoice Line 1 showing Prorated Cost and Loaded Cost

After you use the OK button, the Prorated Cost will be found on each line, and the Loaded Cost will have been incremented by this amount. For ITEM01 the Prorated Cost is $90, and this has been added to the Line Cost of $300 to derive the Loaded Cost of $390.

On Invoice Line 5 for the Standard Service, the Line Cost was $300, the Prorated Cost is -$300 and the Loaded Cost is reduced to $0.
Invoices – Invoice Line 5 (Standard Service) showing Prorated Cost and Loaded Cost

For invoice line 5 which had the FREIGHT item the Prorated field on the right has been set, the Prorated Cost is -300.00 and the Loaded Cost has been reduced to 0.00.

Line Cost + Prorated Cost = Loaded Cost

If you attempt to use the Allocate Service action a second time you will receive a message which will erase previous allocations.
Invoices – Message if you use Allocate Service action a second time

If you used the Allocate Services action again you would receive the warning – BMXAA2030W – Invoice lines have already been allocated. Click OK to erase previous allocations and reallocate them. Using OK is the way to remove previous Prorated Costs, I chose to Close.

Tracking the transactions on Invoice Approval

When I started this article, I was using a system with the Service Provider add-on installed and I came across the following error when I tried to approve the invoice. This has been reported to IBM Support.

BMXAA4214E – An unknown error has occurred. Please contact your system administrator for assistance. Gather the logs from the <HOME> directory and determine where and why the error occurred.
begin 0, end -2, length 12

I restarted the article on another system at MAS 9.1.5 with no HSE, Transportation or Service Provider installed.

You need to approve the invoice before Maximo will write the financial transactions associated with the Allocate Services action.
Invoices – Change Status to Approved

I have changed status to Approved (APPR) using the action Approve Invoice.

We’ll now review the transactions created by the invoice approval starting with Inventory transactions.

Inventory

In the Inventory application for the BEDFORD-CENTRAL storeroom the Average Cost of each of our four items has increased based on the Prorated Cost. For Item 1 with a quantity of 10 and an Average Cost of $30, the $90 Prorated Cost has increased the Average Cost to $39.
Inventory – Showing effect of Prorated Cost on Storeroom Item Average Cost

As these were all storeroom items, the cost of the freight charge is distributed across the inventory items, their average costs are incremented using the Loaded Cost of the invoiced items. The screenshot is for ITEM01, you can see that Quantity Available is 10.00 and the Average Cost has increased from $30 to $39.

Receiving

In the Receiving application and the Material Receipts tab you will find four additional MATRECTRANS transactions each with an Issue Type of INVOICE.
Receiving – Material Receipts showing additional transactions of Issue Type INVOICE

A Material Receipt Transaction (MATRECTRANS object) is written for the prorated cost against each item, they have an Issue Type of INVOICE, and the Quantity is zero. The Material Receipts tab does not show any costs. In the screenshot you can see the four INVOICE transactions, one for each invoice line. In the header the Received Cost is $1300 which is the net total of $1000 plus the prorated freight cost of $300.

The Receiving application doesn't show costs, but you can navigate to the the Inventory application from the Item field and use the View Inventory Transactions action. This shows the quantities and costs associated with the Receipt and the Invoice Prorated Cost.
Inventory – View Inventory Transactions – Receipts & Transfers

If you navigate to the Inventory application from the Item field and use the action View Inventory Transactions, you will find that there are two transactions, one for the RECEIPT of Quantity 10 with a Line Cost of $300 and a Loaded Cost of $300. The other transaction is of Transaction Type INVOICE and has a Quantity 0, with a Line Cost of $0 and a Loaded Cost of $90, the Prorated Cost coming from Invoice 1077.

In the Receiving application and Service Receipts tab there is a transaction with Issue Type INVOICE for the FREIGHT Standard Service. Again the Issue Type is INVOICE. Maximo writes a SERVRECTRANS transaction when the Invoice that references a service is approved.
Receiving – Service Receipts showing additional transaction of Issue Type INVOICE for FREIGHT Standard Service

The approved invoice has created a Service Receipt (object SERVRECTRANS) transaction where the Line Cost is the net amount of $300, and the Loaded Cost has been reduced by the amount of the Prorated amounts; in this case it is $0.00. The Issue Type of this service receipt is INVOICE.

This wraps up Part 1. We’ve seen the use of the Prorate button in the Invoices application action Allocate Services. It has allocated the Standard Service charge for FREIGHT across the four received storeroom items based on the Line Cost of each item. The allocated amount is added to the Line Cost on each invoice line, and the sum will be found in the Loaded Cost. It is the Loaded Cost which effects the Average Cost of the inventory item, the freight charge has incremented the average costs of each storeroom item. The Allocate Services action creates financial transactions on both the Material Receipts (MATRECTRANS), one for each item, and it also writes a Service Receipt (SERVRECTRANS), but in this case the Loaded Cost of the Service Receipt is $0 because the Line Cost of the FREIGHT Standard Service charge has been allocated across the storeroom items.

In Part 2 we will see that we could have achieved the same effect without using the Allocate Services action, just by approving the invoice. Maximo has a function to automatically prorate service.