Further information About Landed Costs

In order for Landed Costs to work correctly, and for the costs to cascade through the system, it must be set up as follows:

Purchasing Cycle

Transaction Interface Used Accounting Entity
PO Entry None None
RN Entry/RN Transfer Inventory Costs Interface Debit Inventory Credit Accruals
PI Entry/Match/Confirm Transactional Interface Debit Accruals (reverse out above) Debit Tax Credit Supplier

Freight Invoice

Transaction Interface used Accounting entity
PI Entry None None
PI Confirm Transactional Interface Debit Expense

Debit Tax

Credit Supplier
Note: It is assumed that the entire invoice is to be treated as an expense. So, if Landed Costs is not performed, then the total amount is expensed.

Landed Costs

The above invoice is then apportioned over one or more purchase orders/invoices. These interfaces are defined on the Charge Rule (CHR).

Transaction Ledger interface used Accounting entry
Any suspended amount Suspended Ledger Interface Credit Expense Debit Suspense Account
For example, an invoice for freight costs is received but it is not known if the inventory costs should be updated yet. In which case, it is entered into a suspense amount.    
Note:  It is assumed that this happens infrequently. If so, a supervisor would have to manually post a journal to transfer the amount from the suspense account to the correct account
   
Expensed Amount No action. The freight invoice line is already expensed.  
Apportioned Amount Apportioned Ledger Interface Credit Expense Debit Accruals
Receipt Inventory Cost Inventory Costs Interface Debit Inventory Credit Accruals
Note: This receipt cost interface is the same interface as that triggered when the inventory was received.

The Landed Costs program changes the receipt costs and so the Receipt Inventory Cost Interface is run. If the receipt has been issued before Landed Costs is performed, the costs are rippled through to the issue costs.