Instructions on how to set up and create documents with landed costs can be found in this SAP Business One Tips How To article.
The landed cost feature is useful when you have material arriving from overseas or want to include third-party freight fees to an item's overall cost.
Use SAP Business One's Landed Cost functionality to:
- Add the cost of 3rd party freight to items in SAP Business One
- Add costs for customs, brokers, and insurance to items in SAP Business One.
A landed cost document will add these types of additional costs to the cost of the item(s) purchased and allocate them across the goods in the way you specify.
A goods receipt PO is used to create the landed cost document. Because SAP Business One uses the goods receipt PO as the starting point for the entire import process, be sure the item pricing and quantities are correct when creating the goods receipt PO. The price of the items is changed after you publish the landed costs document. The landed costs document also creates a journal entry to reflect the increased import charges in accounting because it contains all of the charges that were allocated.
Here's how to set up and create landed cost documents in SAP Business One:
Step 1: Create accounts for Landed Cost Allocation. You must define the proper G/L accounts in order to enable automatic journal entries.
To define the landed cost's allocation account, go to Administration > Setup > Purchasing > Landed Cost. To define the customs allocation and expense accounts, go to Administration >Setup > Inventory > Customs Groups.
Uploading a service A/P invoice to your vendor, who represents the broker you paid the additional expenses to, is the final step in documenting landed cost. So that the amount is cleared, you would credit the vendor and debit the corresponding allocation accounts.
Step Two: Creating a Landed Cost Document
For the order of the products, first construct a goods receipt PO (or several goods receipt POs). After that, you'll need to produce a landing costs document. Go to Landed Cost > Purchasing. Find out who sold the original things and where they came from. Choose a copy from the PO for Goods Receipt. Choose the goods receipt PO for which landed expenses must be charged. To add multiple goods receipts from this vendor, select a duplicate from the previous batch.
Items appear in landed costs document window.
The real expenses are then entered into the landed cost sheet. In the Actual Customs field, enter the costs. The system will ask if you want to allocate costs proportionally among each item number defined in the rows. Click Yes.
The Costs Tab of the Landed Costs Document is where you enter fixed costs like shipping costs. In the Amount field, click on the Shipping Row and enter the cost. You can pick how you wish to allocate shipping expenses across items by selecting allocation by quantity.
Using the New Landed Costs option, you can create new landed cost categories that allocate in different ways. Select OK after entering your code and name, as well as the allocation method (there are several options).
Once you've finished entering expenses, the Items tab will update the rows for each item with the assigned costs and total costs. When you're ready, select Add to add the document. This updates the GL accounts with the relevant costs.
Posting a service A/P invoice to your vendor, who represents the broker you paid the additional expenditures to, is the final step in documenting landed cost. So that the amount is cleared, you would credit the vendor and debit the corresponding allocation accounts.