Create Estimate Landed Costs
You can use a Trade Operation to simulate and estimate landed cost charges associated with purchase order receipts of material. You can create a trade operation for an upcoming shipment to capture the landed cost charges incurred for that shipment.
The landed cost features provide financial visibility into the supply chain costs, including transportation and handling fees, insurance, duties, and taxes. A significant portion of an item's cost can be comprised of landed costs, and it's important to accurately incorporate them into financial processes and decision making. Trade operations are created in the Landed Costs work area on the Manage Trade Operations page. You can associate a purchase order to a Trade Operation based on various identifiers, including purchase order number or advance shipment notice (ASN).
To create estimate landed costs, complete the following steps.
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From the Navigator menu, select Receipt Accounting.
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From the Tasks panel, select Manage Landed Cost Processes.
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Query for and run the process Prepare Material Purchase Order Data. This process updates the list of approved purchase orders that can be selected for landed costs.
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From the Tasks panel, select Manage Trade Operation Templates.
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Search for the required template and click the Create from Template button. Enter the Trade Operation Name and save the Trade Operation.
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(Optional). Enable the Tentative option for any charge lines that you don't want to be included in receipt accounting distributions. This option is only applicable for estimate costs.
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Click on the Associate Default Material Purchase Orders button.
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Click on the Select and Add button and search for and select the required purchase order. You can associate a purchase order to a Trade Operation based on various identifiers, including the Purchase Order number or the Shipment Number (ASN). This associates all of the Trade Operation charges to the material Purchase Order specified in the Trade Operation header.
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Click Save. When the application has associated the purchase order to the Trade Operation charge lines, the Charge Line Status displays a Ready for Allocation message when you hover over it.
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Click on a charge. The Charge Details area of the page shows the purchase order line schedules associated with the charge.
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From the Actions menu in the Trade Operation header, select Allocate Charges. The Charge line status is automatically updated, and the message Successfully Allocated is displayed when you hover over the icon. The total amount of each charge is displayed in the Landed Cost Charges area. This is the estimated charge amount that's anticipated to be applied when the items in a Purchase Order are fully received.
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From the Actions menu in the Trade Operation header, select Update Status.
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Set the Trade Operation status to Open. This informs Receipt Accounting that the charges in this Trade Operation are to be added to the material cost of the items received against the Purchase Orders referenced in the Trade Operation. Create and submit the receipt in the Receiving application.
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From the Navigator menu, select Tools, then Scheduled Processes, then run the Transfer Transactions from Receiving to Costing process.
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In the Landed Costs work area navigate to the Manage Landed Cost Processes page from the Tasks menu. Select the Allocate Landed Cost Charges process and set the Apply Charges to Receipts option to Yes in the Define Parameters region. Submit the process.
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(Optional). From the Navigator menu, select Receipt Accounting. From the Tasks menu select Create Receipt Accounting Distributions.
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Select View Item Landed Cost from the Tasks menu. Select the PO number and receipt. The item landed costs displayed include the material and landed cost charges.