Allocating landed costs to purchase order rows

Landed costs such as freight, duty or insurance are allocated to stock tracked items on purchase orders. This can be done before or after receiving the items into stock, as long as any received goods are still in stock.

If any of the items on the row have already been sold then the purchase order row will not be available to allocate landed costs to.

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.

Allocating landed costs to purchase order rows

  1. Start 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:

    Landed costs PO

    Go to Purchases > List recent purchase orders, select the relevant orders and click the Allocate landed costs batch processing button:

    Landed costs batch PO

    Go to Purchases > Allocate landed costs and then use the filters to search for the relevant purchase order rows:

    Landed cost menu

    Note that drop-ship purchases and partially sold batches of items will not be displayed.

  2. Select all the purchase order rows against which the landed cost is to be allocated and click the Allocate Landed Costs button.

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  3. In the pop-up window, complete the details of the landed cost:

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    The fields are:

    Field Description
    Distribute by

    Specify how to distribute this landed cost across the items. 

    Choose from:

    • Value
    • Weight
    • Volume
    • Quantity

    Rows with higher levels of these qualities will be allocated more of the landed cost. Note that when using weight or volume, the product records must have these details.

    See below for more information on these methods.

    Account code

    This is the account used to post the accounting for landed costs.

    The default code is set at Settings > Company > Accounting: Acccount codes (nominal 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 vendor who is charging you 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.

    Click "Allocate".

  4. The landed cost preview screen is displayed informing you of how the costs have been distributed and how they will affect the item values. You will see the original price, the current landed price, the unit adjustment being allocated, the total adjustment for all units, and the new total price.

    Nothing has happened at this stage. This is simply a preview to double check before affecting your stock.

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  5. Click Confirm to complete the process and commit the uplifted cost to the items, or click Cancel to abandon the allocation process.

You will be returned to your originally selected items so that you can land more costs if needed.

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:

  • Value

    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.

  • Quantity

    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.

  • Volume

    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.

  • Weight

    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.

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