Receiving Free/Bonus/Promotional Products

Owned by Diane Partridge
Last updated: Jan 11, 2022
2 min read

Overview

Stock received from suppliers at zero cost as promotional items needs to be receipted into Readysell just like any other stocked line. The system automatically skips cost updates when receipts process at zero cost. But if the promotional stock is for a product that you also sell at a price. The margin on your sales reports can be lumpy, moving up and down more than usual when you sell those lines for free on promotion.
After the receipt is complete. Associated products are used to usually used to implement deals such as buy one get one free. See assocated products tab on Product General. Contracts can also be used to get the same result.

Procedure

Free or bonus stock may be receipted as samples as as part of a promotion. When you receipt stock with a zero cost. The existing cost on the product is not updated. So it is safe to receipt bonus stock at zero cost.
The bonus product may not currently be setup on your product file. If the product does not currently exist you will need to create the product before you process the stock receipt. You can create the product manually. If the product details are in the price book you can copy the details from the price book to the new product. Bonus items should normally be in a product category setup for stocked items. As you will be keeping a stock on hand figure for the bonus product.

Some of the matters to consider when receipting free or bonus stock include the following :
 
  1. Ensure that the product is set up as a Stock Controlled Product.
  2. Ensure that the product is in the correct Product Category.
  3. If the product does not exist on the database, set the product up with a zero cost.
  4. If the product already exists with a cost leave it as is.
  5. Receive the stock at zero cost this will not update the costp1 to zero on that product. No need to create a purchase order, just a purchase receipt and then invoice it at $0 with No update of Costs option.

 
Example, if you receive 10 of a product of which 8 at a cost and 2 at no cost. Firstly enter the purchase receipt with the 8 at a cost price, then on a separate line receipt of the 2 at the Zero cost.


When you eventually sell the product, FIFO will allocate the free stock against the sale which will cause the margin of that sale line to increase. This can cause some lumpiness in your profitability report. Sales will not for example set the cost of the free product to zero. The cost on each sale line will depend on the cost of the oldest stock with an available balance. Not being effected by the sell price being zero or not on any sale line. The result being some of your free products will show negative margins when you give them away and some of your products sold at a sell price will show 100% margin. See also How Readysell FIFO first in first out costing works in your business