Landed Costs
This guide explains how to capture additional expenses—like freight, customs, and insurance—and apply them to your inventory value.
For a conceptual overview, see Explanation: Understanding Landed Costs.
Creating a Landed Cost Record
- Navigate to Inventory → Landed Costs.
- Click Create New.
- Select the Vendor Bill that contains the additional costs (e.g., your freight invoice).
- Enter the Total Amount to allocate.
- Choose an Allocation Method (e.g., "By Weight" for freight).
- In the Stock Pickings section, click Attach Stock Picking to select the receipt(s) these costs apply to.
- Click Validate.
Example: Import Scenario
If you are importing electronics:
- Products: 100 Smartphones and 50 Tablet Cases.
- Freight Bill: $800 from a shipping company.
Process:
- Create a Landed Cost for $800.
- Set method to By Weight.
- Attach the receipt of the smartphones and cases.
- Validate.
The system will automatically add a portion of that $800 to each smartphone and tablet case based on their weight, increasing their "landed" cost per unit.
Troubleshooting & Tips
- Validation is Permanent: Once you click Validate, the inventory value is updated and journal entries are posted. To fix a mistake, you must Cancel the record and create a new one.
- Multiple Costs: You can create multiple Landed Cost records for the same shipment (e.g., one for Freight, one for Customs).
- Timing: It is best to apply landed costs before you sell the items, so your Cost of Goods Sold (COGS) is accurate from the first sale.