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
- currency conversion
- payment fees and any other costs outside our direct inventory purchase cost.
These costs are typically applied by handling or fulfilment services under their own invoice, which then need to be allocated to the correct purchase invoices.
To allocate landed costs to an invoice:
- Navigate to Purchases -> New.
- Select Blind Receipt.
- Enter the landed cost invoice details.
- Enter the costs in the Additional Costs pane (in this case, insurance of $150 and shipping of $350).
- Click Authorise.
- Click the Expenses button which has now appeared.
- Select an expense to distribute.
- Click the +Allocation button and select the invoice you want to distribute these expenses to. You can choose a single invoice or multiple invoices. You can either:
- manually type in the cost you want to allocate to each invoice
- or click Auto-allocate to have the system do it for you. Allocated costs are calculated proportionally based on the invoice cost.
We can now see that links to the invoices have been created. Click the link to go to the relevant purchase order invoice. The allocated expenses can be viewed by clicking the Manual Journals tab.