Cost Processing route is a way (scenario) how a purchase cost for transaction line will be processed by SMT. Processing Route dictates the sources of purchase cost and their priorities.
Processing Route is assigned by SMT based on some pre-defined characteristics of transaction lifecycle. A processing route can be changed (re-classified) during the lifecycle. For example, a sales order line starts with Selling from Stock processing route, but once a Purchase Order is created, the route changes to Drop Ship or Special Order. One transaction line can also be split into two processing routes, e.g., part of the quantity is purchased from vendor (Drop Ship) and the rest is sold from stock (Selling from Stock).
Cost Processing Routes are configured as child records linked to the parent SMT Configuration record. Each processing route can have different update approach assigned, based on the stage of SMT Calculation. The stages are:
- Initial Estimate Update – creation or update of anchor transaction, or any related transaction until the final document is created and approved.
- Transfer to Final Value – creation or approval (if required) of the final document.
- Final Value Update – update of final document that caused update of margin.
These 3 stages can have a different update approach assigned for each processing route:
- No Calculation – SMT will not create any SMT cost for the processing route in this stage.
- Keep Original – if the cost has changed, SMT will ignore the change and will keep the original cost it calculated the first time.
- Replace Existing – SMT will replace the original cost if it has changed.
- Keep Original and Add Variances – SMT will keep the original cost and calculates a difference (delta) between the current (new) and original cost and creates a variance record for it.
- Recalculate Variance – variance will be always recalculated and will replace the previous one.
- N/A – not all stages are applicable for all processing routes, e.g., standalone documents do not have estimates, therefore there is no need to assign an update approach for it.
Along the update approaches, there are three additional settings that can be configured for a processing route:
- Exclude Cost Calculation – SMT will not create purchase cost for this processing route.
- Use Allocation - If this is enabled then the difference between transaction amounts (e.g., PO and VB) is split (allocated) between sales rep and company and considered in margin calculation. Only applicable and editable if “Use Purchase Price Variance Percentage for Calculation” is enabled on SMT Config. Only applicable for Drop-Ship/Special Order, Return Process and Project to Cash.
- Use Allocation Threshold - If this is enabled and “Use Allocation” is enabled for this Processing Route, then allocation threshold defined on SMT Config will be considered when comparing values. Only applicable and editable if “Use Purchase Price Variance Percentage for Calculation” is enabled on SMT Config and “Use Allocation” is enabled on SMT Cost Processing Route. Only applicable for Drop-Ship/Special Order, Return Process and Project to Cash.
SMT Configuration record is distributed together with Cost Processing Routes subrecords, and it is recommended to use the predefined approaches.
