Excluding Shipping Cost from Profits

Q: I would like to exclude the cost of shipping from our profit margin on our invoices when looking at our sales report. Right now, we have shipping set as Ship under Services, but this includes shipping as 100% profit. How can we add a cost to this service?

A: The best way to exclude shipping cost from your profits is to distribute the expense via landed costs. You can create a PO as a blind receipt and then distribute the expense to the sale at the cost price. This way, you will be purchasing the service and then selling it at the cost price, which will not show a profit or loss in your records. For a step-by-step guide on how to apply landed costs, click here.

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