Define distributed costs on an inbound shipment

Related topics

Distributed landed costs are costs distributed across all received lines. If, for example, your company is charged sea freight for carrying a container which holds several purchase order lines, the cost of the freight can be considered as a landed cost. This means that the cost should be distributed across the order lines according to, e.g., the gross volume of the items on each purchase order line.

Distributed costs can be defined in the following routines:

when confirming a reception note via the Confirm purchase order reception note menu item. Note: The reception note has to be connected to a shipment to be able to define distributed costs in this program. However, that connection can also be established in the Purchase order reception note confirmation routine before defining the costs.
via the Work with inbound shipments menu item.

The distributed costs can be defined/changed as long as the shipment is not booked, i.e. as long as the shipment status is below 60.

If you know the rules for calculating the cost, e.g., the cost should be based on the gross volume of each order line, you can define the cost method to use before the actual reception of the goods takes place.

When the goods are received into stock and the reception is closed, you should re-allocate the costs before booking the shipment. This is due to the fact that, for example, the weight and volume of the order lines has been changed and/or the expected quantity was not received. See Allocate costs on the inbound shipment.

If you are not aware of the cost before you receive an invoice of the costs, you can still receive the goods into stock and perform quality control check (if required). When the invoice(s) is received, you enter the costs in the shipment, close and book. See Close all receipts on an inbound shipment for information about how to close a shipment. See Book an inbound shipment for information about how to book a shipment.

Note: The goods are not updated and available in stock until the shipment is booked.

Prerequisites
The landed cost type to be used to calculate the distributed cost has to be defined in the Landed cost type table. Refer to step 4 below.

Select the Work with inbound shipments menu item.
On the initial panel, mark the shipment on which you want to define distributed costs and click Costs.
On the Work with landed costs panel, click Add dist cost.
You access Shipment costs. Complete the following fields:

Landed cost type: Enter the landed cost type. Tip: If you click OK before completing the Cost alloc method field, the default method will be retrieved from the Landed cost type table.
Vendor: Enter the supplier from which you will receive the invoice of the cost. Note: This supplier has to exist in the Business partner file. The shipping agent specified on the shipment is defaulted, but can be changed.
Transaction amount: Enter the total cost for this type. This is the amount your company will be charged by the company defined in the Vendor field above.
Transaction currency: Enter the currency in which the transaction amount is expressed.
VAT based: Set this field to YES if this is a VAT based transaction. Tip: The VAT handling code (see field below) will be retrieved automatically when you click OK. The rules for retrieving the VAT handling code is the same as when retrieving VAT handling codes for order lines.
VAT included: Set this field to YES if the VAT is included in the transaction amount. Otherwise set it to NO.

Click OK.

You remain on the same panel. The following fields are relevant:

Cost alloc method: Displays the cost allocation method defined for the landed cost type entered in the Landed cost type field.

In addition, the description of the landed cost type and the name of the vendor are displayed. In the System value field, the transaction amount is displayed in system currency. For the purpose of this example the transaction currency and the system currency are the same.

Exchange rate: If Fixed rate is set to YES by default, you have to define in this field the exchange rate that will be used when this cost is booked. If it is set to NO by default, the system will retrieve the current exchange rate. However, the default can be changed.; Tip: It is not necessary to enter the Cost alloc method and VAT handling code as the system retrieves these values based upon details entered in other tables. If one or more of these are defaulted into these fields, an informational message will be displayed at the bottom part of the panel.

Click OK to confirm.

You access Work with landed costs again. The following information is displayed:

Distributed: Displays the total distributed cost on the shipment.
CC: Is set to YES if a cost check is required. The items included in this shipment will not be available in stock until the shipment is closed and booked.

Check cost allocation
To view the cost allocated to each order line, select the cost type and click Display allocations.

You access Cost allocation by type, where the following information is displayed:

Alloc amount: Displays the amount allocated to the purchase order line.
Line value: Displays the value on which the allocated amount is based.
Perc: Displays the percentage of the Total value field (in the top part of the panel). This is calculated as:

Click OK to return to the Work with landed cost panel. Note: A situation may occur where discrete costs have been calculated for each line on a shipment and, when notification of the cost is received, the sum of the costs of each line does not add up to the notified cost. In this case the In-/re-activate disc cost option can be used to inactivate the discrete costs before entering the notified cost and distributing this across the lines.

Return to the Work with inbound shipments, Headers panel. If all the goods on the shipment are received you have the following options from which to choose:

define additional distributed costs by repeating the steps outlined above.
define discrete landed costs for the order lines. See Define discrete landed costs for a purchase order line on an inbound shipment.
close all receipts for the shipment. See Close all receipts on an inbound shipment.