A landed cost is the total price of a product once it has arrived at the buyer's door.

The landed cost includes:

• The original price of the product
• All transportation fees
• Customs
• Duties
• Tax
• Insurance
• Currency conversion
• Crating
• Handling
• Payment fees and any other costs outside our direct inventory purchase cost.

You can watch a quick tutorial on Landed Cost or follow instructions below.

Scenario:
We just received an invoice from our fulfillment center for goods they shipped to us a month ago.

Now we will create a service only invoice using the Additional Costs section for the costs on the invoice.

Go to:
Purchases > Orders > New Purchase

• Enter all invoice details (Insurance of \$150 and shipping of \$350)
• Choose correct expense accounts
• Authorize the invoice

• An Expenses button will appear. By clicking on it I can now attribute these costs to an invoice that they relate to.

• Select the expense you want to distribute first
• You can attribute costs to multiple invoices or just to one single invoice.
• Click the +Allocation button and select the invoice you want to distribute these expenses to. There is an option to auto allocate or you can manually type how much should be distributed. Then hit save.

Note:

Cost will be distributed based on the cost of the items not their quantity/weight.

For example you have:

• 5 units of A = \$250
• 2 units of B = \$450
• 3 units of C = \$300

On an invoice and you want to distribute freight cost of \$350.

The freight amount will be distributed as follows amongst the products:

• Total invoice (\$250 + \$450 + \$300) = \$1000
• Landing cost of A= \$250 + \$100/1000\$*250\$ = \$337.50
• Landing cost of B= \$450 + \$100/1000\$*450\$ = \$607.50
• Landing cost of C= \$300 + \$100/1000\$*300\$ = \$405

We can now see a link has been created to the invoice.

If we click on the link it will take us to the invoice these expenses were distributed to.

Take a look at the manual journals tab where we can see the journal entries that have been generated.