Landed costs such as freight, duty or insurance are allocated to stock items on purchase orders. This can be done before or after receiving the items into stock, but they must still be in stock. If any of the items on the row have already been sold then the purchase order row will not be displayed.
You can continue to allocate landed costs to purchase order rows even when the purchase order is invoiced, as long as the inventory has not shipped to a customer yet.
- Access the landed cost process in one of the following ways:
Open the purchase order, click the arrow on the side of the save changes button and select Allocate landed costs
Go to Purchases > List recent purchase orders, select the relevant orders and click the Allocate landed costs batch processing button
Go to Purchases > Allocate landed costs and then use the filters to search for the relevant purchase order rows
Note that drop-ship purchases and partially sold batches of items will not be displayed.
- Select all the purchase order rows against which the landed cost is to be allocated and click the Allocate Landed Costs button.
- In the pop-up window complete the details of the landed cost:
Distribute by: Specify how to distribute this landed cost across the items. When using weight or volume the product records must have these details.
Account code: This is the account used for the accounting for landed costs. The default code is set at Settings > Company > Accounting: Nominal codes/Account codes. Ask your accountant if you have other codes for different types of landed costs.
Currency: Specify the currency of this landed cost.
Exchange rate: The system exchange rate is picked up automatically once the currency is selected, but it can be changed.
Payable to: Select the supplier of this landed cost. This can be the same or different from the purchase orders. Ensure it is the company who will be paid for this landed cost.
Reference: Enter a unique reference, such as the shipping container, to make searching and reconciling these landed costs easier later.
Amount: Enter the full landed cost charge in the currency chosen above.
The landed cost preview screen is displayed informing you of how the costs have been distributed and how they will affect the item values. Nothing has happened at this stage. This is simply a preview to double check before affecting your stock.
- Click the Allocate button to distribute the cost across the items on the selected purchase order rows. You will get the opportunity to review the details before committing them.
- Click Confirm to complete the process and commit the uplifted cost to the items.
You will be returned to your originally selected items so that you can land more costs if needed. If you choose to Cancel you will be warned that your allocations will be lost if you continue. If you continue you will be returned back to your selected items to start again.
Note: If you try to simply navigate away from the page before cancelling or confirming you will be warned that your changes will be lost and you will have to start over by filtering and selecting your items.
Cost distribution methods
Brightpearl provides the following methods of apportioning a landed cost across items on a purchase order:
This method will use the price on the purchase order. Apportioning based on value might be chosen for costs such as insurance, since more valuable items in a shipment are likely to cost more to insure, therefore allocating more of the cost to those items may give a more realistic distribution.
This method will use the quantity on the purchase order to calculate how much of the landed cost should be allocated to the purchase order row.
This method will use the dimensions and volume recorded the product record of each item. Apportioning based on volume might be chosen for costs such as space on a shipping container, since larger items in a shipment are likely to cost more to transport, allocating more of the cost to those items may give a more realistic distribution.
This method will use the weight recorded on the product record of each item. Apportioning based on weight might be chosen for costs such as freight which is charged on weight, since heavier items in the truck are likely to cost more to be delivered, allocating more of the cost to those items may give a more realistic distribution.
When allocating a landed cost in Brightpearl, select the method of distribution you want to use for that particular cost.