Setting Up Miscellaneous Landed Costs
Miscellaneous landed costs include costs of obtaining the item, such as freight, insurance, duty, taxes, and handling charges. In order to record miscellaneous landed costs, you must first define several factors. You must decide how to categorize and identify landed costs by using cost elements and miscellaneous charge codes. You can set up the conditions that the system uses to automatically apply miscellaneous landed costs to POs. You must establish how the various miscellaneous landed costs are calculated and prorated to receipt and voucher distribution lines.
To set up miscellaneous landed costs:
(Optional) For reporting purposes, you can group similar landed costs together to make reports more readable to users. Use the Landed Cost Group page to create groups for landed costs. For example, air freight and ocean freight components might be grouped into a single freight cost group.
Create cost elements with the cost category of landed. Cost elements enable you to account for and report on different types of costs. This enables you to accurately identify each different type of miscellaneous landed costs. Use the Cost Elements page to create cost elements. A landed cost element can be made up of one or many miscellaneous charge codes.
Define miscellaneous charge codes (also know as cost components) to define miscellaneous landed costs along with the attributes that identify how and when the landed costs are to be applied, calculated, and prorated. Use the Misc Charge/Landed Cost Definition page to define miscellaneous charge codes. Define which cost element the miscellaneous charge will summarize into.
(Optional) If you plan to applying several miscellaneous charge codes to a single PO line, then consider using the landed cost template to group all the related charge codes together and apply them as a group. This feature enables you to quickly apply charge codes and track relationships for future changes to the structure. Use the Misc Chg/Landed Cost Template page to define different collections of miscellaneous charge codes.
(Optional) You may tell the system when to apply the miscellaneous charge codes or landed cost templates to a PO. This is done by identifying the properties that must exist on a PO in order to apply the charge codes. Use the Miscellaneous Charges - Miscellaneous page to associate templates or charge codes and specific charge amounts for any combination of item category, item ID, supplier ID, supplier location code, ship-to ID, and purchasing business unit. When one of these item/category/supplier combinations is included on a PO, the system applies the template or charge code, and then calculates and prorates the estimated landed costs to the PO schedule line.
(Optional) For items that you wish to define a standard cost profile to be used for analytical purposes.
Note: If you do not need to update landed costs to actual amounts because the estimated costs are accurate, then include the landed costs by using the Additional Item Costs page. Apply the estimated landed costs to the item by simplifying entering the costs by cost element on the Additional Item Costs page. This method does not update inventory values or create variance when the voucher is processed.
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Page Name |
Definition Name |
Usage |
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CM_LC_GROUP |
Aggregate landed cost charges into cost groups for reporting purposes. |
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CM_ELEMENT |
Use to categorize the different components of an item's landed costs. |
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CM_LC_COMPONENT |
Define miscellaneous charges, including landed costs, to be applied to POs. |
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CM_LC_TEMPLATE |
Define different collections of landed cost charge codes that you can apply to groups of purchased material. |
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ITM_CAT_VNDR_MC |
Enter the criteria for applying miscellaneous charge codes or landed cost templates to POs. |
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Miscellaneous Charges Selection Page |
ITM_CAT_MC_CRITERIA |
Enter the criteria for the miscellaneous charges to appear on the Miscellaneous Charges - Miscellaneous page. |
To create landed cost groups, use the Landed Cost Group (CM_LC_GROUP_GBL) component.
Use the Landed Cost Group page (CM_LC_GROUP) to aggregate landed cost charges into cost groups for reporting purposes.
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For reporting purposes, you can group similar miscellaneous landed costs together to make reports more readable to users. Use the Landed Cost Group page to create groups for landed costs. By SetID, enter a group ID and a description. As you define miscellaneous charge codes on the Misc Charge/Landed Cost Definition page, enter the related landed cost group ID. Set the parameters of the reports to view the information by cost group.
Use the Cost Elements page (CM_ELEMENT) to use to categorize the different components of an item's landed costs.
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Cost elements are used for more than landed cost charges. They identify and categorize all the different components of an item's cost and also define the debit and credit ChartField combinations for accounting entries. Cost elements enable you to report and record costs in different categories. For landed costs, you create one or more cost elements for reporting. When setting up a cost element for landed costs, you must identify its category as landed.
To define miscellaneous charge codes, use the Misc Charge/Landed Cost Defn component (CM_LC_COMPONENT).
Use the Misc Charge/Landed Cost Defn page (CM_LC_COMPONENT) to define miscellaneous charges, including landed costs, to be applied to POs.
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This example illustrates the fields and controls on the Miscellaneous Charges/Landed Cost Defn page. You can find definitions for the fields and controls later on this page.
This page is used to identify both miscellaneous charges and miscellaneous landed cost charges. Landed costs charges are prorated to the PO distribution lines, receipt distribution lines, and voucher lines. A landed cost can be from the merchandise supplier or a third-party supplier.
If you select the Accrue Charge check box, then the estimated landed costs for that miscellaneous charge code are included in inventory value at putaway. If you do not select the Accrue Charge check box, the system waits for the actual landed costs (recorded on the matched and posted voucher) and then records the actual landed costs in an expense account. The non-accrued charges are not included in the inventory value.
Note: PeopleSoft's landed cost feature can be used to record the non-recoverable portion of excise duty, customs duty, and sales tax for India. Define a miscellaneous charge code by using the VAT input non-recoverable type and selecting the Prorate and Landed Cost Component options. The non-recoverable portion is recorded in the item value.
To create a landed cost template, use the Misc Chg/Landed Cost Template component (CM_LC_TEMPLATE).
Use the Misc Chg/Landed Cost Template page (CM_LC_TEMPLATE) to define different collections of landed cost charge codes that you can apply to groups of purchased material.
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If you plan to apply several miscellaneous charge codes to a single PO or PO line, then consider using the landed cost template to group all of the related charge codes together. You can apply them as a group to the Miscellaneous Charges - Miscellaneous page or directly to the PO by using the Header - Miscellaneous page or the Schedule-Miscellaneous Charges page. This feature enables you to quickly apply charge codes and track relationships for future changes to the structure. Use the Misc Chg/Landed Cost Template page to define different collections of miscellaneous charge codes.
Use the Miscellaneous Charges - Miscellaneous page (ITM_CAT_VNDR_MC) to enter the criteria for applying miscellaneous charge codes or landed cost templates to POs.
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This example illustrates the fields and controls on the Miscellaneous Charges - Miscellaneous page. You can find definitions for the fields and controls later on this page.
In order to have the system automatically populate the POs with the correct miscellaneous charge codes and charge amounts; you must design a series of parameter combinations. When a PO is entered that matches the combination of parameters that you define, the assigned charge code or template is used.
You can set up default miscellaneous charges that are automatically calculated based on these combinations, where level one overrides level two, and so on:
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Level |
Miscellaneous Charge Hierarchy Criteria |
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1 |
Item, supplier, purchasing business unit, and ship to location. (INV_ITEM_ID, VENDOR_ID, BUSINESS_UNIT, and SHIPTO_ID) |
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2 |
Item, supplier, and purchasing business unit. (INV_ITEM_ID, VENDOR_ID, and BUSINESS_UNIT; and no SHIPTO_ID) |
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3 |
Item and supplier. (INV_ITEM_ID and VENDOR_ID; and no BUSINESS_UNIT nor SHIPTO_ID) |
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4 |
Item. (INV_ITEM_ID; and no VENDOR_ID, BUSINESS_UNIT, nor SHIPTO_ID) |
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5 |
Category, supplier, purchasing business unit, and ship to location. (CATEGORY_ID, VENDOR_ID, BUSINESS_UNIT, and SHIPTO_ID; and no INV_ITEM_ID) |
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6 |
Category, supplier, and purchasing business unit. (CATEGORY_ID, VENDOR_ID, and BUSINESS_UNIT; and no INV_ITEM_ID nor SHIPTO_ID) |
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7 |
Category and supplier. (CATEGORY_ID and VENDOR_ID; and no INV_ITEM_ID, SHIPTO_ID, nor BUSINESS_UNIT) |
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8 |
Category. (CATEGORY_ID; and no INV_ITEM_ID, VENDOR_ID, BUSINESS_UNIT, nor SHIPTO_ID) |
For example, you can set up miscellaneous charges that are automatically calculated on the PO when a certain item is ordered from a particular supplier, for a particular purchasing business unit, and for a specific ship to location of the business unit. You can also set up a miscellaneous charge that is automatically calculated for a particular item.
Only one Miscellaneous Charges - Miscellaneous page combination is used for each charge code. If you define the same charge code at multiple levels, the system uses the Miscellaneous Charges - Miscellaneous page at the most specific level of detail. However, you can define more than one charge code. For example, if you define a miscellaneous charge named shipping for an item (level 4), and also for the category (level 8) that the item belongs to, only the charge that is defined for the item is used. The miscellaneous charge that is defined for the category is only used for items that do not have a miscellaneous charge that is specifically defined for them. However, if you define one charge code (shipping) at the item level and another charge code (handling) at the category/supplier/Purchasing business unit/ship to location, then the PO picks up both the handling and shipping charges.
Field or Control |
Description |
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Template ID |
If you want to apply a template of miscellaneous charges, select the template ID. Miscellaneous charge templates are set up on the Misc Chg/Landed Cost Template page. |
Misc Chg (miscellaneous charge) |
The miscellaneous charge code. If you want to apply a miscellaneous charge code, select the charge code ID. Miscellaneous charge codes are set up on the Misc Charge/Landed Cost Definition page. |
Calc Method (calculation method) |
Select the method that you want to use to calculate this charge. The default comes from the Misc Charge/Landed Cost Defn page. Choose from these options: FL (flat amount): The charge is a flat amount that you enter in the Amount field. FR (free): No charge is to be applied. UNT (per unit amount): Calculate the charge based on the number of items on the PO line. VAL (percent of value): Calculate the charge based on a percentage of the material value. VOL (rate based on volume): Calculate the charge based on the total volume for the PO line. WT (rate based on weight): Calculate the charge based on the total weight for the PO line. |
UOM (unit of measure) |
The unit of measure, for volume or weight, depending on the choice that you made in the Calc Method field. |
Unit Price |
The per unit amount of the charge. |
Value % |
If the miscellaneous charge is a percentage of the unit price, this is the percentage of the charge. |
Amount |
The fixed order amount of the miscellaneous charge. You can define both a unit price and an amount if the calculation method is UNT, VOL, or WT. |
Currency |
The currency of the miscellaneous charge. |
Alloc Method (allocation method) |
Select the method to allocate the miscellaneous charge. The default comes from the Misc Charge/Landed Cost Defn page. Options are: Matl Value (material value): Allocates the charges based on the value of the items on each selected line. Quantity: Allocates the charges based on the quantity of items on each selected line. Volume: Allocates the charges based on the volume of the items on each selected line. Weight: Allocates the charges based on the weight of the items on each selected line. |
Merch Supplier (merchandise vendor) |
The Merch Supplier option setting appears by default from the miscellaneous charge's purchasing attributes on the Misc Charge/Landed Cost Defn page. You can override the setting here as necessary. If you select this option, charges are paid to the PO supplier. If you do not select this option, you can use the Supplier and supplier Location fields to designate a third-party supplier. |
RTV Credit (return to vendor credit) |
Select this check box if you can receive credit from the vendor for these miscellaneous charges if the items are returned. This check box is only active if the merchandise supplier is selected. |
Selection Criteria |
Click to access the Miscellaneous Charges Selection page, where you enter the criteria for the miscellaneous charges to appear on the Miscellaneous Charges page. |
Miscellaneous Charges Selection Page
Use the Miscellaneous Charges Selection page (ITM_CAT_MC_CRITERIA) to enter the criteria for the miscellaneous charges to appear on the Miscellaneous Charges - Miscellaneous page.
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Enter criteria in each field to narrow the search. For example, if you enter only a SetID, then all the miscellaneous charges that are set up on the Miscellaneous Charges - Miscellaneous page for that SetID are retrieved. If you enter a SetID and an item, then all the miscellaneous charges that are set up for that item in that SetID are retrieved.
Enter the maximum number of rows that you want to retrieve in the Max Rows field.