Adding landed cost charges as line items

What This Does

When you create a purchase order or cash purchase, you can add one or more landed cost charge lines—such as freight, customs duty, insurance, or handling fees. These charges are recorded alongside your regular inventory line items and will later be allocated to those items based on your chosen allocation method.

Before You Start

• You must have permission to create or edit purchase orders or cash purchases.
• Know what landed cost charges apply to this purchase (e.g., freight amount, customs value).
• Decide which allocation method you will use (by value, weight, or volume) when you receive the goods.
• Ensure that your regular inventory items have already been added to the purchase document.

Steps

1. Navigate to Purchases → Purchase Orders or Purchases → Cash Purchases.
   Open in Usystems · Open in Usystems

2. Create a new document or open an existing one to edit.

3. Add your regular inventory line items (products, quantities, prices) as you normally would.

4. Scroll down to the Landed Costs section.

5. Click + Add Cost (or the equivalent button to add a landed cost line).

6. In the new line, enter:

   • Charge type: The name or description of the charge (e.g., "International Freight", "Customs Duty", "Insurance").
   • Amount: The total cost of that charge.

7. Repeat step 5–6 for each additional charge (e.g., add a separate line for freight, then another for customs).

8. Save the purchase document.

9. When you receive the goods, you will choose how to allocate these charges across your inventory items. See Manual per-line cost allocation for details.

Accounting Impact

When the purchase is received and landed costs are allocated:

• The cost of each inventory item is increased by its share of the landed cost charges.
• The debit to Inventory (or Goods-in-Transit) accounts reflects the full allocated cost, including landed charges.
• The credit to the Accounts Payable account (if on credit) or Cash (if paid) reflects the full invoice total plus all landed cost charges.

Tips & Common Mistakes

• Record charges when you know them: Add landed cost lines as soon as you have freight quotes or customs estimates. You can adjust them later if the actual amounts differ.
• Use descriptive charge names: "Freight - DHL" is clearer than just "Freight," especially if you have multiple carriers.
• Don't forget the small costs: Insurance, port fees, and broker commissions add up. Include them for accurate cost tracking.
• Review before receiving: Double-check all landed costs before you receive the goods, as allocation happens at receipt time.