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Former Member

Landed Cost GL account allocation


Im trying to setup landed costs to calculate the price of each item individually after freight forwarding, customs brokerage and duty fees.

Im confused on what allocation method I should choose.

Also, I need to create a GL account for landed cost allocation. Where in the chart of accounts would the new GL go? Expenditures?

Thanks in advance!


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1 Answer

  • May 26, 2015 at 08:08 PM

    It should be under COGS.

    The flow is like this.

    Let's say u create a COGS account - Freight Ocean.

    You first create a A/P invoice against Freight Ocean, let's say $1000. Debit Freight Ocean $1000, Credit A/P $1000

    And then you use Landed cost module, (create a landed cost code to use Freight Ocean). When you put $1000 here on landed cost, it will credit $1000 on Freight Ocean and Debit your inventory $1000.

    So after the above two transactions, your Freight Ocean is zero out, and AP credit 1000, and Inventory Debit 1000.

    This is how it works.

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    • In the allocation, you can use multiple landed cost codes (each is related to different COGS account).

      Just remember you use A/P invoice to put money in those COGS account, and use Landed Cost to take them out and average to Inventory.

      So at the end, the Landed cost COGS account are zero.