Landed Costs - Setup
Dimensions Only - This feature is not available in Dimensions Lite
Landed Costs are the additional costs incurred when purchasing a stock item. These might include such costs as duty, transport, insurance and handling costs but the Landed Cost feature can be used to deal with any directly attributable costs.
Landed Costs are only recorded when a stock item has been set up as a Sub Analysis type and details have been set up for it on the Landed Cost tab card.
These costs are not included in the Cost Price but may be included in the Valuation of the stock item. This is dependent on the method of valuation you have selected..
When the stock item is sold, the Valuation can be reduced by the Cost Price and by the associated Landed Costs.
You can apply a maximum of ten Landed Cost lines to a single stock item.
Landed Costs can be applied to purchases in a number of ways: as a Percentage, as a specified Value per item, as a Fixed Value regardless of quantity ordered, or based on Transactions (this is useful where you need to split a transaction value out over multiple Sub Analysis codes).
All types except Transactional Landed Costs are calculated from POP, SOP and Stock transactions.
These transactions are either
Movements In (Purchase Orders, Stock Movements in, Stock Takes (increases), Sub Analysis Transfers - in, and SOP Credit Notes), or
Movements Out (Sales Orders, Stock Movements out, Stock Takes (decreases), Sub Analysis Transfers - out and POP Credit Notes).
Landed Costs are calculated as follows:
Movements In are always calculated precisely, on a line by line basis. That is, each Landed Cost line is calculated independently.
For example in the following set up for a quantity of 10 items:
the Landed Cost moved in would be 64 (16.50 + 7.50 + 40),
Quantity of 10 at Cost Price of 15 would be 150,
and the Total Value moved in would be 214 (150 + 64).
Line No | Landed Cost type & Value | Calculation | Total |
1 | Value £1.65 | 10 x £1.65 | £16.50 |
2 | Percentage 5% | (£15 x 5%) x10 | £7.50 |
3 | Fixed 40 | £40 | £40 |
Movements Out generated by Sales Orders, Stock Takes (decreases), Sub Analysis Transfers and Stock Movements out using the Selling Price are calculated using an average Landed Cost.
The value moved out will depend on the Profit Cost method selected in Stock Options - Records tab.
If the Profit Cost method is Weighted Average, or Fixed Weighted then the Weighted Average Cost already includes an element of Landed Costs and stock valuation is reduced by:
Weighted Average Cost x Quantity moved out.
If the Profit Cost method is Landed then the stock valuation is reduced by:
(Cost Price as defined by the stock valuation method + Average Landed Cost) x Quantity moved out.
Movements Out generated by Stock Movements out using the Cost Price, are calculated as:
Cost Price (as entered on the Stock Movement transaction) x Quantity moved out.
Landed Costs for Percentage, Fixed and Value purchase transactions are based on Physical and Order In quantities, not on the Purchase Order totals.
Setup
Landed Costs are part of the Sub Analysis feature, which is a chargeable function - this needs to be unlocked.
Security Profiles
The following Transaction Options involve Landed Cost:
Stock Movements | Enable/Disable Update Landed Costs |
Stock Take | Enable/Disable Update Landed Costs |
Sub Analysis Transfers | Enable/Disable Movement Type |
The following Transaction Options involve Landed Cost:
Landed Costs |
Enable/Disable Process
Enable/Disable Delete
|
Stock Options - Records
Valuation Method:
The Weighted Average and Fixed Weighted methods of valuation will incorporate any relevant Landed Costs.
Profit Cost method:
If you wish landed costs to be passed into the profit cost, you should select Fixed Weighted or Weighted Average or Landed Cost as your profit cost method.
Analysis
If you wish to enter Landed Cost details directly through the Purchase Ledger, you must set up some Analysis records with the option Update landed Costs selected.
Purchase Order transaction Detail lines for Sub Analysis type stock items, that use an analysis code for which the Update Landed Costs flag is set, will generate a transaction to update Landed Costs.
Stock Records - Sub Analysis - Landed Costs tab card
Stock records that are to have Landed Costs recorded against them must have their Type set to Sub Analysis. This allows for the possibility of additional costs varying from batch to batch.
Click on the Sub Analysis function function, and when the Sub Analysis window is displayed, select the Landed Costs tab card.
This has 10 sets of fields as shown below:
10 user definable Descriptions, 10 Value fields, 10 Committed Cost fields and 10 Total (Actual Cost) fields.
To set up a Landed Cost element:
Enter a Description of the element of the Landed Cost to a maximum of 20 characters.
Select the Value Type from the menu: Value, Percentage, Transaction(s) or Fixed Value.
Enter the Value for all except a Transactional Type, this takes its Value from the Transaction itself.
Value Enables you to add a financial value Landed Cost per item.
Percentage This enables a fixed percentage to be assigned per item, e.g. Tax.
Manually enter the percentage to be applied to the Landed Cost line, and this will be calculated as a percentage of the Latest Value held for that Stock record.
Transactions This enables a Purchase Ledger transaction to be allocated to a stock item.
For example, a single Purchase Ledger Invoice can be allocated to a number of Stock Sub Analyses, or a Stock Movement can record the Carriage charge associated with a Sub Analysis item.
Fixed Value This enables entry of a fixed Value to the Stock record, regardless of the number of items involved.
The Landed Cost is calculated based on the Cost Type as follows:
Value, the Cost field shows Qty in stock x Value entered in the first field
Percentage, the Cost field shows Qty in stock x (Latest Cost of stock x Percentage entered in first field).
Fixed, the Cost field shows the Fixed Value entered only.
Transactions, the Cost field shows zero until transactions are allocated to the item through Purchase Ledger (or other) Transactions.
Transaction Options
When entering Transactions, several Options affect the way you can use Landed Costs, refer to these for further information.