What Is Landed Cost?
Landed cost represents the total cost of acquiring a product and bringing it to your warehouse. It includes not just the item's purchase price but also additional expenses like shipping, taxes, handling, and tariffs.
For example, if the unit price of a coffee mug is $10 and the additional costs for shipping, taxes, and manual handling total $2, the landed cost would be $12.
How to Enable Landed Cost
To use the landed cost feature, go to Stores & Files, then select Inventory Files. In the File Settings, enable the Landed Cost option to start tracking these expenses.
How to Allocate Landed Cost
Option 1: Manual Allocation
You can manually add and allocate landed costs for each bill:
Open the Bill Section and select a bill.
Add the landed costs (e.g., freight, tariffs, or other expenses).
Enter the total amount for each item, and the system will distribute the cost per unit.
Example: You bought 100 units with a total freight cost of $100.
Additional freight cost per unit = $100 ÷ 100 = $1.
New unit cost =$11.
Option 2: Advanced Allocation
Freight Costs Allocation:
To allocate freight costs, click + Add Landed Cost and use the advanced feature. Each item has fields to enter its dimensions (height, width, length) and weight. The system uses this information to calculate landed costs based on the selected method.
CBM (Cubic Meters): Larger items incur higher costs based on their volume.
Weight: Heavier items receive a greater portion of the freight cost.
Split Evenly: Costs are divided equally among all units. This option is best if weights or dimensions are unavailable.
You can also upload these dimensions and weights in bulk by navigating to Items under the Inventory tab. Use the Import button to upload an Excel sheet containing the details.
Adding Tariff Cost
Tariff costs can be allocated using one of the following options:
Tariff Rate: Add a tariff rate (e.g., 10%) for each item, and the system will calculate the tariff based on the item's cost.
Total Tariff Paid: Enter the total tariff for the shipment and allocate it:
By Cost: Higher-cost items receive a larger share of the tariff.
Evenly: Divide the tariff equally across all units.
Syncing with QuickBooks
Navigate to Stores & Files > Inventory Files > Accounting Settings, and link the landed cost accounts (Freight, Tariff, and Other) to the appropriate QuickBooks account.
When exporting bills to QuickBooks, the system will decrease these accounts (e.g., freight) and increase the inventory asset account.
For any additional questions about the landed cost feature, please reach out to support. We're here to help.