The contract cost option in price matrix allows the cost of an item to be set for a customer or group. The true margin is shown when the item is sold to the customer and the inventory GL account is credited with the amount that was paid for for that inventory item.

Using this feature requires initial setup.

Contract Cost Differential Account

In Company Settings a GL account must be selected for posted cost differences when using contract costs for customers. Entering a differential account activates the feature – the vendor and contract cost fields only appear on price matrix records if this differential account has been configured.

Price Matrix

After setting the item and the customer or group, select a vendor and the contract cost the vendor will give for this customer. Also set the price the customer will pay for this item.


When this item is sold to the customer the cost and the sell price will come from the price matrix record. It will show the contract cost and the margins based on that cost.

GL Posting

Once the invoice is posted, the journal entry includes all the cost accounts with respective amounts. Note that the difference between the Cost of Goods Sold and Inventory Control accounts is posted to the ‘Vendor Rebates Receivable” account as set in Company Settings.

Instructional Video

Was this helpful?

Yes No
You indicated this topic was not helpful to you ...
Could you please leave a comment telling us why? Thank you!
Thanks for your feedback.