Landed cost: freight, duty and insurance on received stock

Spread the charges of getting goods in onto the receipts they belong to, so stock is valued at what it really cost and margins are not distorted the month a freight bill arrives.

A goods receipt values stock at the purchase order price. Freight, import duty, cargo insurance, handling and the customs broker's fee are part of the cost of that stock as well (IAS 2, ASC 330). A landed cost voucher adds them: it names one or more goods receipts, lists the charges, and spreads each charge over the receipt lines.

1. Open Accounting > Landed Cost > Landed Cost Vouchers and press New. Leave the kind as Actual for a charge somebody has billed.
2. Use Add receipt to bring a goods receipt's lines onto the voucher. Add as many receipts as the charge covers, such as every receipt from one container.
3. On the Receipt lines grid, correct the weight or volume to what the carrier charged on, if you will spread by weight or volume.
4. On the Charges grid, enter each charge: its type (freight, duty, insurance...), the amount and currency, how it is spread, and the freight invoice or supplier invoice it came on.
5. Press Preview. Every line shows its share of each charge, how much goes to stock still on hand, how much to cost of goods sold, and the landed unit cost.
6. Press Post. One journal is posted: inventory and cost of goods sold debited, landed cost clearing (2060) credited.

• By value: in proportion to what each receipt line cost. The usual choice for duty and insurance.
• By quantity: in proportion to the units received. Suits handling charged per unit.
• By weight or by volume: in proportion to the weight or cubic volume on the receipt lines. Suits freight.
• Manual: the percentages typed on the receipt lines, which must add up to 100.
• Only this receipt line: a charge that belongs to one line, such as duty on one item of a mixed container.

When the freight bill is entered in Accounts Payable, code it to the landed cost clearing account (2060). The voucher's credit and the bill's debit then cancel.

1. To value stock at its landed cost before the carrier bills, set up Landed Cost Templates: a charge type, a supplier or item (or neither, for everything), and a rate as a percentage of value, per unit or per kilogram.
2. On Supply Chain > Goods Receipts, press Accrue landed cost on the receipt. An estimated voucher is made from the templates and posted to the landed cost accrual (2065).
3. When the real charge arrives, make an Actual voucher, choose the estimate under Trues up the estimate, enter the real charge and post. The accrual is released in full and only the difference reaches stock and cost of goods sold.