Introduction to landed costs

The landed cost feature allows you to record the total cost of inventory for Cost of Sales accounting, including purchase price, freight, insurance, custom duties and other costs.

Without factoring additional costs into your inventory asset value, your Cost of Sales will just be the price you paid the supplier for the goods, which often is not truly representative of the cost.

Examples of costs which you might want to include in the cost of inventory are:

  • Hiring a shipping container
  • The cost of traveling the container by land, air or sea
  • Insuring the goods during transit
  • Duties payable to get the goods into the destination country
  • Taxes payable when bringing the goods into the destination country

LC how it works

When to allocate landed costs

The Brightpearl landed costs feature makes accounting for these costs at the right time really easy, but it also provides more accurate profit analysis on your sales. To ensure these figures are reported on your sales detail the information needs to be there at the time the item cost of sale is recorded, and this means you need to allocate landed costs to your stock before inventory is shipped.

If you have fast moving stock you may not know your exact landed cost figure until it is too late and the items have been received into stock and shipped out for a sale - it is therefore better to estimate your landed cost and allocate it to items before they are shipped than to wait until you have the actual cost and potentially miss out on more accurate profit analysis per item. Then, once you do know your actual landed cost you will be able to make all the necessary adjustments to ensure the accounting is all correct.

Overview of the landed costs workflow

This example shows the case where you receive freight cost invoices before the inventory arrives. It's also possible to assign cost invoices after you have received inventory.

  1. Place a purchase order with a supplier. Line items show the cost you pay the supplier.

  2. Items are shipped to you. While they are in transit you receive invoice(s) for freight, duty, storage etc.

  3. Enter cost invoices either as separate vendor invoices, or by adding lines to the original purchase order if the supplier is the same as for the products.

  4. Assign cost invoices to purchase order lines, distributing the cost by item value, quantity, physical volume or weight.

  5. Commit these extra costs. You can assign multiple costs to the same order rows.

  6. Receive the inventory. The asset value will include the extra costs, and the accounting will be done for you.

  7. Reconcile landed costs. Due to discrepancies introduced by early-estimating of landed costs, rounding and currency calculations, you'll need to reconcile the final landed costs against the exact value of the vendor cost invoices.

For more details on each of the above stages, explore the rest of this help center section.

Turning on the landed costs feature

  1. Go to Settings > Purchases > Purchase settings, and ensure that Activate landed costs = Yes. If you can't see this setting, contact Brightpearl support to get the feature activated for your account.
  2. Visit Settings > Company > Accounting: Accounts (Nominal codes) to check the landed costs account (normally 2070, but if that is being used it will use the next free number i.e. 2071).


By default, users can see the landed costs report and the additional columns on other reports such as the inventory detail. If you want to turn off access to landed costs, you can do so from the permissions page reached via Settings > Staff / users > List staff.






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