Add Landed Cost

Landed Cost is an extra charge incurred upon receiving the items from a supplier. These are added by retailers on top of the cost of the goods to estimate the “true” value/cost of the items. Landed costs are those extra costs such as freight charges from an overseas supplier, brokerage or logistics fees, insurance charges, customs, etc.

1. Go to Supplier module.
   
   
2. Click on Bill > New Bill.
   
   
3. Select an active supplier on the Supplier list tab.
   
   
4. On the Supplier form, click on Items tab.
   
   
5. Select the item that requires a landed cost application.
   
   
6. Click on the Landed Cost button from the menu. On the Landed Cost pop up window, you have two options to apply the value:
   
   

   

   Click Image to Enlarge
   
   

   1. BY ITEM VALUE
      
      Given with a landed cost value=x, you can apply the amount through the formula indicated below.
      
      
      
      Scenario: Let say, you ordered items from an overseas supplier and upon receiving the items, you have to pay for the custom charge. The custom charge costs 100USD which you will apply as a landed cost for your bill.
      
      Items Ordered:
      
      

      Item Name	Confirmed Qty	Expected Cost	Confrimed Cost	Total
      A	2	24.64	24.64	49.28
      B	4	46.89	46.89	187.56
      B	6	75.42	75.42	452.52
      GRAND TOTAL (Total Column)				689.36

      When you click on the Landed Cost button and apply 100 as an item value, what happens is that the landed cost will be distributed to each item line and per item. Computation is as follows:

      Item Name	Confirmed Qty	Computation	Value Proportion (Per Item)	Value Added To Each Line Item
      A	2	(49.28/689.36/2)*100	3.574330	7.14866
      B	4	(187.56/689.36/4)*100	6.801961	27.207844
      B	6	(452.52/689.36/6)*100	10.940583	65.643498
      ADDED VALUE (Total Column)				100.000002 ≈ 100.00

      Note that the system will automatically round off the last item value to meet the exact added landed cost. The landed cost will now be added to the total gross.

      Item Name	Confirmed Qty	Expected Cost	Confrimed Cost	Total
      A	2	24.64	28.21433	56.42866
      B	4	46.89	53.691961	214.767844
      B	6	75.42	86.360583	518.163498
      GRAND TOTAL (Total Column)				789.360002 ≈ 789.36

      
      
   2. BY WEIGHT
      
      

      Before applying the values, make sure that each item has an indicated weight from the setup tab on the item form. The system does not apply any landed cost for a bill when it detects no weight is indicated on the item.

      The unit measure for weight can be defined from the System Manager > Accounts > My Account. On the My Account form, select the system of Measurement. Options to choose from are: English or British System (lbs), Metric System (kgs).
      
      Given with a landed cost value=x, you can apply the amount through the formula using the weight option.
      
      
      

      Scenario: Let say, you ordered items from an overseas supplier and upon receiving the items, you have to pay for the custom charge due to the weights incurred. The custom charge costs 100USD which you will apply as a landed cost for your bill.
      
      Items Ordered:

      Item Name	Confirmed Qty	Item Weight (in lbs.)	Expected Cost	Confirmed Cost	Total	Total Weight (in lbs.)
      A	2	1.75	24.64	24.64	49.28	3.5
      B	4	2.50	46.89	46.89	187.56	10
      B	6	5.25	75.42	75.42	452.52	31.5
      GRAND TOTAL (Total and Total Weight columns)					689.36	45

      When you click on the Landed Cost button and apply 100 as an item value, what happens is that the landed cost will be distributed to each item line and per item.

      Computation is as follows:

      Item Name	Confirmed Qty	Computation	Value Proportion (Per Item)	Value Added To Each Line Item
      A	2	(3.5/45/2)*100	3.888889	7.777778
      B	4	(10/45/4)*100	5.555556	22.222224
      B	6	(31.5/45/6)*100	11.666667	70.000002
      ADDED VALUE (Total Column)				100.000004 ≈100.00

      Note that the system will automatically round off the last item value to meet the exact added landed cost. The landed cost will now be added to the total gross.

      Item Name	Confirmed Qty	Expected Cost	Confirmed Cost	Total
      A	2	24.64	28.528889	57.057778
      B	4	46.89	52.445556	209.782224
      B	6	75.42	87.086667	522.520002
      GRAND TOTAL (Total Column)				789.360004 ≈ 789.36

      Definition of Terms:

      • Value Proportion – is the ratio of the landed cost value per line item and per item. This is the value added to the total price on the bill for each item indicated in the order.
        
        
      • Σ Line Item – the total price for all item ordered, confirmed quantity x confirmed cost.
        
        
      • Σ Weight Item – the total weight of all items ordered per line item, confirmed quantity x weight
        
        
      • Confirmed Quantity – the number of quantity per item indicated in the order.
        
        
      • Landed Cost Value – the amount indicated in the landed cost window.
        
        
7. After applying the landed cost, click on Save and Close button from the menu.