Contributions allow you to include costs that cannot be directly allocated to a particular activity or product in your cost prices, and to make the origin of these indirect costs visible. You might want to use contributions, for example, to distribute warehouse costs and administration contributions to the cost prices of orders you have handled.
Contributions are calculated at so-called 'realization times'. Warehouse costs, for example, could be calculated at the time parts are issued. Over time, you can compare the contribution costs posted with the actual costs incurred. This will enable you to check whether the contribution defined matches the actual costs incurred, and adjust the contribution where necessary.
Register the types of contributions you want to use in Contribution groups. For instance, you could create the contribution groups 'Warehouse' and 'Administrative charges'. Then use the Contributions form to define the different contributions within these groups and to specify how they are to be apportioned to orders.
The contributions to be distributed to the orders dealt with can be allocated in three ways: By sales type, part group, or administration.
Example
The costs of a warehouse employee making issues all day are very difficult to allocate to a specific product or service; they are 'indirect' costs. You still want to apportion these costs, however. If you define a contribution for these costs, this contribution will be posted at the time direct costs are incurred, for example when a part is issued (this is called a 'realization point').
The question is how to apportion the indirect costs. Isah offers various ways of doing this. For instance, you could post the annual costs of the warehouse employee by item or kilo issued.
At a realization point (the time of an issue, for example), the indirect costs contribution is apportioned based on the actual costs. In other words: the contributions are realized at particular points, and then posted to a separate ledger account.