The item charge functionality in Dynamics NAV gives you the option to include additional costs such as freight, insurance, fuel charges, etc. in the unit cost or unit price of an item transaction. Item charges are something that most companies that handles any type of inventory would benefit from using. When implementing item charges there are a couple of things to be aware of.

Non-Inventoriable Costs

Item charges can be entered on a purchase invoice or purchase order and applied to an outbound transactions such as a sales shipment or a purchase return order. When doing this you get a non-inventoriable cost as a value entry. This does not create any g/l entries, the only place you see the affect of a non-inventoriable cost is in the statistics of an item and in the ‘Cost Amount (Non-Invtbl.)’ field on the item ledger entries.

Receiving / Shipping Item Charges

Item charges can be entered on a purchase or sales order. When receiving or shipping a line with an item charge you don’t get any transactions at all. There is no expected costs postings for item charges even if you turned this on the in inventory setup. This would have been very nice, but unfortunately it does not work like this. Something to wish for in future releases…

Item Charge Dimensions

Item charges creates value entries related to the item ledger entries of the shipment/receipt that is it applied to. Those value entries (and the related g/l entries) get dimensions according to the dimensions on the document line where the item charge is entered. This sometimes causes issues if you for example have an item charge that is applied towards multiple receipts that contains items with different default dimensions.

Users quite often setup the default dimensions on items with the ‘Value Posting’ equal to ‘Same Code’ because they want to prevent posting with other dimension values on the item. Doing this will also prevent posting the item charges with different dimension values that the one define as default on the items.

The recommended way to handle this is to setup the default dimensions on the items with the ‘Value Posting’ equal to ‘Code Mandatory’ and have a separate dimension values for the item charges, this way the item charges will always post and you can identify/separate them during reporting. Note: if you for example want to report the inventory value by the dimensions defined on the items then you can build your report based on the item ledger entries that contains the correct dimensions from the items and with the values including the item charges.

It would have been nice if the dimensions for the value entries created during posting an item charge would be retrieved from the related item ledger entry, but it does not work like this. Something to wish for in future releases…