Understanding Ship and Debit Adjustments
Distributors, suppliers, and manufacturers often enter into agreements with each other to address the price and cost fluctuations that are associated with certain components and products. Within the electronics industry, these agreements are known as ship and debit adjustments.
Ship and debit processing is designed to give you leverage, which helps you keep inventory moving. It can help you stimulate sales for a specified period with discounted prices.
Ship and debit adjustments do not change inventory costs. Instead, they are recognized as a cost-of-goods-sold sales reduction and affect the company's profit margins. Consequently, these adjustments also affect commission amounts.
You might have many different ship and debit adjustments set up with different suppliers and pertaining to many different items. Typically, ship and debit adjustments are time sensitive. The system enables you to specify the period that you and suppliers have set up for adjustments. Ship and debit processing helps you manage these complex adjustments and their resulting claims.
You can set up a ship and debit adjustment to use a minimum or maximum price and to adjust the unit price of a particular item, customer, item group, customer group, or combination. For example, if the receipt price of an item is within the minimum or maximum amount you set, then the system does not adjust the unit price of the item. If the receipt price is below the minimum or above the maximum amount that you set, then the system adjusts the unit price of the item.
See Understanding Adjustment Definitions.
You can use the Price Matrix program (P4590) to add and edit a multitude of adjustment detail records in the F4072 table. Using this program enables you to access a view of the adjustment detail records and to quickly enter and maintain pricing information.
See Understanding the Price Matrix.