Intuit is sending out notices to Enterprise V12 users about a problem with the new price/cost update feature. You might not see this notice, as it might not go to all users and I’m not sure if they are notifying ProAdvisors. Even if you have updated to the R3 release you still may run into a problem where your item cost and price are updated incorrectly. There is a workaround, fortunately.
This article was updated on 11/3/2011 with major changes (all of which I haven’t marked because there were so many). And again on 11/4/2011
11/10/2011: This problem is RESOLVED with the 2012 R4 update.
The Automatic Cost and Price Update feature is one of the major improvements in QuickBooks Enterprise Solutions V12. I really like the enhanced ability to control how costs and sales prices of items are updated when you purchase/receive new items.
Unfortunately, this new feature has some problems. Two weeks ago Intuit issued the R3 release which fixed one of the problems, where changing the sale price or cost of one item and then viewing another item in the edit item window would alter the values for the second item. R3 fixed this, thankfully.
Now, however, it looks like there is still a problem with this feature. I’ve seen it discussed in the Intuit Community Forum, as well as in comments in my blog article on the R3 release. The problem is, under certain circumstances, item costs and prices may be updated incorrectly. In fact, we may still have an issue where changes in one item may still affect costs/prices in another item.
It is important to note that these bugs do not affect your financial statements directly. These are changing your “cost” field, not the received cost that is posted in a transaction. It can also change your sales price, which might eventually effect sales transactions if you don’t notice the change, but there isn’t a direct bug in how the receipt transactions are recorded.
Intuit’s message to Enterprise users acknowledges that the problem exists, and says that they’ll have a fix soon. There is a KB article that talks about how to change your preferences to avoid the problem from happening again until there is a fix. They also note that these steps will not bring back any prices or costs that may have changed incorrectly due to these issues.
If you are using Enterprise 12 I strongly recommend that:
- You make sure that you are using the R3 release (press the F2 key in QB to see what release you have).
- You read the KB article at http://support.quickbooks.intuit.com/support/Articles/SLN54380 and follow the steps there carefully. The sequence that you perform the steps is important.
Note, though, that I think that they leave out one step, which I’ll talk about later in this article. Also, there are a few errors in the original KB article as I’ll point out.Intuit has corrected the errors in the KB article on 11/4/2011
Looking at this in more detail
Prior to Enterprise V12 if you received an item at a different cost than what was found in the item list, you would be asked if you wanted to update the cost. It was a simple question. This is one of those one time questions where you can tell QuickBooks to remember your answer and not ask you again. That sometimes caused problems because people might answer “always update” and “don’t ask again”, even though that wasn’t what they wanted. Note that this only affected the cost of the item, it wouldn’t affect the sales price of the item.
With Enterprise V12 we were given much more detailed control over this feature. You now have a global preference where you can set it to always update, never update, or ask to update. You could have the sales price updated based on the changed cost. And, you could override these settings on an item-by-item basis.
Look in your Items & Inventory Preferences and you will see a section on Automatic cost and Price Updates. The two settings are found at the bottom of the screen.
I’ve been playing with this, and deciphering the Intuit KB article (the intial release was a bit confusing, they might update it after awhile). The way it reads is that if change the price of an item in a form it automatically changes the price of the item, regardless of your settings.
In talking about this with Intuit, I get some mixed messages. The KB article talks about changes in a form – that implies when you change costs in a purchase order or an item receipt. Discussions with Intuit directed me towards a different situation – when you click the edit markup button either when editing an item, or when you get the cost changed window on a PO or receipt. Two very different situations – it is possible that BOTH are involved.
The problems have to do with how your automatic cost/price preferences are set, as well as the older one time message about updating costs. The mechanism that was introduced in Enterprise V12 has some flaws, which they are working out. The r3 release fixed some problems, this KB article fixes some of the problems, but it might not be entirely corrected until the R4 release (hopefully coming out soon?).
Look at the KB article and follow the instructions. The steps must be followed in the order they specify, because some of the changes trigger some internal features that aren’t obvious.
The end result of the changes will be that you do not want the item price change parameter to be set to NEVER UPDATE and it is important that you reset the “one time messages”.
Please note that in the original KB article there are some errors that may be confusing. My thanks to reader Andrea Lee Carter for pointing this out. In changing the “When item cost changes’ preference you will be selecting “Ask about updating sales price”. The option that they list doesn’t exist for this preference. Note that this error has been corrected on 11/4/2011
Another oversight in the KB article : After you set the Automatic Cost and Price Updates preferences the KB article has you reset the “one time messages”. The KB article does not point out is that You should do this for each user login since this is a preference setting stored per user. Note that Intuit corrected this in the KB article on 11/4/2011
From what I see here this bug won’t affect everyone – it depends on how you have set these options. Lots of people haven’t started playing with it yet. Unfortunately, if you did run into the problem, it would change values for your item records without your being aware of the changes. There isn’t a way to see which items DID get changed incorrectly, either. Fortunately we have this workaround to prevent further problems until the feature is fixed.
One question that I had after reading the KB article was about the per-item preferences for cost/price updates. You can override the global preferences on an item by item basis. Does that mean that you have to go back through all of the items? I checked on this, the word is that the per-item preferences do NOT have the problem, so you don’t have to worry about them.