Slide 1

Slide notes: In this tutorial we consider the Landed Cost Objects. Landed Costs are additional costs that are incurred in the purchasing of Stock, and that are not included in the Supplier Price for the Stock Items. In fact, the Landed Costs may be a combination of additional costs on the Purchase Order and / or other Costs not included on the Purchase Order, like more Taxes, Transport or Shipping Costs, etc.

Slide 2

Slide notes: For the Stock Item that we are looking at in this example, there is currently no Landed Cost indicator. In fact, there does not have to be, since it is entirely optional, and Landed Costs may be processed in more than 1 way. The Landed Costs Levy objects are used only when we choose to use the 'standard rated' costing method provided by these Landed Costs Levy objects. And, we can use this method on some Stock Items without having to use them on others, and we can also combine this method with other Landed Costs methods.

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Slide 4

Slide notes: As an example, we will now select a Landed Costs option on this Stock Item.

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Slide 6

Slide notes: And when such a Landed Costs Levy is present on the Stock Item, then this will result in automatic processing of standard rated Landed Costs on this Stock Item whenever we process this Stock Item on a Purchase Order. In other words, this is automatic, and requires no further steps from the User during Purchase Order processing.

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Slide 8

Slide notes: Now let us have a look at the Landed Cost objects master.

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Slide 11

Slide notes: We can define any number of such Landed Cost objects, each with different Percentage Levy and / or Costing Account.

Slide 12

Slide notes: A Landed Cost object always has a short code and a descriptive label to recognize it by. It then states a Costing Account to use for processing, and the Percentage Cost Levy to be calculated.

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Slide 1

Slide notes: We can sum up the process for Standard rated, Automatic Landed Costs processing like this. Landed Costs on a Purchase Order or in addition to a Purchase Order, i.e. a separate Invoice or number of Invoices may be charged to a Costing Account of our choice. Then, our standard rated Landed Cost Levy objects may be used for selected Stock Items, so that when these Stock Items are processed on Purchase Orders, the system will automatically raise a Cost to the Stock Item, while crediting the Landed Costs expense account. In this manner, a break-even balance is sought on the Costing account, while automatically distributing standard rated Landed Costs to Stock Items, and which become part of the average cost for the Stock Items. Finally, we note also that there are more methods available for Landed Cost processing, and this is discussed in other tutorials in the Purchasing and Procurement set.