Further information About Landed Costs

Landed Costs must be set up correctly for the costs to cascade through the system.

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.