Landed Cost Billed Separately With a Cost Estimate

See the following example of landed cost billed separately with a cost estimate.

Note:

This example is not applicable for Standard Cost items. For an example on using landed cost with standard cost items, see Landed Cost With Standard Cost Items.

To bill landed cost separately with a cost estimate:

1. Medical supplies are received against a purchase order. The freight charges are commonly not known before the freight vendor's bill is received.

   Note:

   Items are purchased from a supplier and the shipping charges to be allocated as landed costs are billed separately.

2. If landed costs are not known at the time of receipt, enter an estimated amount. For example, after the initial item receipt, the warehouse staff are responsible only for the inspection and receipt of quantities. The warehouse staff then forwards any documentation to the accounting employees who can edit the transaction and enter estimated landed cost values.

   The value entered can be allocated using one of the following methods:

   • Weight

   • Quantity

   • Value

     The value can be sourced in one of the following methods:

   • Manual – The user enters the value manually

   • Other Transaction – Another transaction is the source of the value

   • Other Transaction (exclude tax) – Another transaction is the source of the value, excluding taxes

     Note:

     When the cost source is based on Other Transaction (exclude tax), the tax calculation depends on whether you use Legacy Tax or SuiteTax.

     For more information, see Landed Cost and Taxation.

   The amount is entered manually and the receipt saved. In this example, a $25 Freight landed cost to be allocated by weight is added:

   The GL Impact shows the following entries for landed costs:

   • The Memo field includes the landed cost and item code to display the exact allocation details.

   • The value of the landed cost is now included in the inventory asset total. Because the freight expense account is a holding account, the amount is credited on the receipt. Later, when the vendor bill is entered, the same value is debited to this account to offset to zero.

     Account	Amount (Debit)	Amount (Credit)	Posting	Memo
     Accrued Purchases		125.00	Yes
     Inventory Asset	100.00		Yes
     Inventory Asset	25.00		Yes
     Inventory Asset	11.43		Yes	Freight Charge RW001
     6000 Freight and Delivery		11.43	Yes	Freight Charge RW001
     Inventory Asset	8.57		Yes	Freight Charge BW005
     6000 Freight and Delivery		8.57	Yes	Freight Charge BW005
     Inventory Received Not Billed		(125.00)	Yes
     Inventory Asset	100.00		Yes
     Inventory Asset	25.00		Yes
     Inventory Asset	11.43		Yes	Freight Charges: RW-001
     6090 Freight and Delivery		11.43	Yes	Freight Charges: RW-001
     Inventory Asset	8.57		Yes	Freight Charges: RW-006
     6090 Freight and Delivery		8.57	Yes	Freight Charges: RW-006

3. The freight bill is received from the vendor. The amount may be different than the estimated landed cost entered. The landed cost amount is entered on the Item subtab of the vendor bill with the specific landed cost item, such as Freight.

   Landed cost vendor bills can be entered as a multiple shipment summary or a single shipment.

   Option One: Summary Bill

   Enter this bill as a summary of one vendor's charges across a period, such as a week or month, for many different shipments completed.

   1. Enter the bill and do not fill in the Landed Cost Category column.

   2. The GL impact shows correctly with a DB to Expense.

      Account	Amount (Debit)	Amount (Credit)	Posting	Memo
      2000 Accounts Payable		24.00	Yes
      6090 Freight and Delivery	24.00		Yes

   3. Edit the item receipt and update the landed cost amount to the true value. Leave the Source set to Manual.

   4. The GL Impact is updated to reflect the new value.

      Account	Amount (Debit)	Amount (Credit)	Posting	Memo
      Accrued Purchases		125.00	Yes
      Inventory Asset	100.00		Yes
      Inventory Asset	25.00		Yes
      Inventory Asset	13.71		Yes	Freight Charge RW001
      6000 Freight and Delivery		13.71	Yes	Freight Charge RW001
      Inventory Asset	10.29		Yes	Freight Charge BW006
      6000 Freight and Delivery		10.29	Yes	Freight Charge BW006

   Option Two: Single Bill

   Enter a vendor bill specific to only one shipment.

   1. Enter the vendor bill and be sure to use a landed cost item.

      Important:

      To let this transaction be sourced to the inventory item receipt using the correct landed cost type and amount, complete the Landed Cost Category field.

      The bill originating from the original purchase order may also contain lines linked to a Landed Cost Category and operates in the same manner.

   2. Edit the item receipt and change the Source field to Other Transaction or Other Transaction (exclude tax).

   3. In the Transaction field select the Vendor Bill. The transaction amount is populated into the Landed Costs Amount field. The transaction column displays Null if the reference field on the bill is not populated.

   4. The GL Impact is updated to reflect the new value.

      If some of these items have already been sold, the inventory costing impact on the fulfillments will be updated to include the new value.

Related Topics

• Landed Cost Billed Separately With Advanced Receiving
• Landed Cost and Items Billed Separately

General Notices