Three scenario in which you can create Landed cost Document 1. Purchase Order
Goods Receipts PO Goods are not issued)
2. Purchase Order
AP Invoice
Landed Cost (when
Goods Receipts PO AP Invoice Goods Issue / Issue To Production (Partial Quantity Quantity Issued of GRPO) Landed Cost. 3. Purchase Order
Goods Receipts PO AP Invoice Goods Issue / Issue To Production (Full Quantity Issued Issued of GRPO) Landed Cost.
I ) Purchase Order Goods Receipts PO Goods are not issued)
AP Invoice Landed Cost (where
1.
The first step in the process involves sending a purchase order (PO) to a vendor. This step is optional. However, However, this document will update the available available stock quantity of the ordered items. Creating a goods receipt PO is mandatory for the process. The goods receipt PO creates an inventory receipt transaction. SAP Business One uses the goods receipt PO as the base reference for the entire import process; therefore, you should be sure to specify the item prices and quantities correctly. 2.
The item prices you you specify in the goods receipt PO document document are the vendor's prices (Ex-Factory or FOB price), excluding the additional costs which will be allocated later for the entire GRPO or shipment. The total amount of the goods receipt PO PO should be the overall price price your vendor will charge you for the shipment, excluding the additional costs you must pay other parties, such as your customs duty, Brokerage paid to C&F C&F Agent, Freight Charges Octroi Charges, Insurance etc. 3.
To complete the accounting transaction of the process, create an A/P invoice based on the goods receipt PO as soon as the invoice arrives in your office. Create the A/P invoice (Service Type) for Expenses incurred much the same as you would create an A/P invoice sent from one of your local vendors. You can create the A/P invoice (Service Type) anytime and regardless of the date when you actually record the landed costs document. The landed costs document should be based on the goods goods receipt PO. The landed costs document is used to load additional additional expenses incurred incurred on 4.
the cost price of the items. This is required for calculating the inventory valuation, the gross profit, or any other inventory-related calculation.
Steps involved to Create Landed Cost Document. Go To Purchase AP
Landed Cost.
Landed Costs General Area Fields Field Vendor
Description/Activity Enter the vendor code. To select a code from the list of vendor codes, press TAB or click Choose from List . To open the Business Partner Master Data window and to add a new vendor record, choose New in the List of Business Partners window.
The field on the left displays the vendor code and the field on the right displays the vendor name. If you create one landed costs document when you import goods from several vendors, the field on the left displays the string '********' and the field on the right displays Different Vendors. For example, in consolidation purchasing a single container is used for importing goods from several vendors to decrease import costs. View the list of vendors selected for the document on the tab. . Broker Enter the code and the name of the broker hired to assist with the import & customs procedures. To select a code from the list, press TAB or click Choose from List . To open the Business Partner Master Data window and to add a new broker record, choose New in the List of Business Partners window. You define brokers as other regular vendors in SAP Business One (see Business Partners → Business Partner Master Data). Currency Displays the vendor currency used in the document (e.g If GRPO Currency is EURO then select EURO). When you create a landed costs document, enter an exchange rate. Otherwise, you will not be able to continue recording the landed costs document. & then change currency to INR Closed Select when you finish processing a landed costs document and, if required, Documen clear it as long as the journal entry for the document’s landed costs has not t been created. As a rule, SAP Business One selects the checkbox automatically, once a journal entry for the document’s landed costs is created. In that case, it cannot be cleared again. Number Displays the successive number automatically assigned by SAP Business One according to the definition (see Administration → System Initialization → Document Numbering ). Series Displays the numbering series for the document. Click to choose a
Posting Date
Due Date
Reference File No.
different series, if required. Enter the posting date to determine the time period for the landed costs document to be included in reports. The default value for this field is the current date on which the landed costs document is created. Change this date if necessary. Enter the due date for the document. The default value for this field is the current date on which the landed costs document is created. Change this date if necessary. Displays an additional reference number for the document, if defined. Displays the number of the landed costs document as provided by your broker.
Goods Receipt PO :-- Choose to open the List of Goods Receipt PO and to view a list of all the open goods receipt PO for the vendor selected. Choose those that are delivered against document as under.
Landed Costs: Items Tab To access the tab, choose Purchasing – A/P
Landed Costs
Items.
Definition Use this tab to display the data regarding the goods copied from goods receipt PO documents.
Landed Costs Items Tab Fields
Field Item No. Qty FOB Price
Description/Activity Displays the item numbers of the imported items as displayed in the selected goods receipt PO documents. Displays the quantities of the items in the selected goods receipt PO documents. Displays the price that appears in the Item row in the goods receipt PO documents. If a discount was given in the goods receipt PO document, SAP Business One calculates the FOB Price as the row price deducted by the discount amount. This price reflects the net vendor price excluding import costs.
Exp. Cust.
Expenditure
Whse Price
Displays the expected customs. It is calculated by multiplying the FOB price by the customs rate paidfor each item Displays the expenses for each item unit as calculated in the current document. According to the landed costs allocation, this value is the weighted ratio of each item without the overall costs calculated in the document. Displays the price of the imported item in your warehouse. The price is calculated as follows: FOB Price + Expected Customs + Expenses = Price at Warehouse
Total Warehouse Release No. Var. Costs Const. Costs
Displays the value calculated by multiplying the price in the warehouse by the imported quantity. Displays the warehouse in which the imported item is located.. Displays the release number for the customs purposes. Displays the variable costs related to the item. Displays the fixed costs related to the item.
Last Exp. Customs Expected Customs Actual Customs
Total Expenses Amount to Balance
Remarks Before Tax Total
Displays the expected calculated customs for the item. Displays the total expected customs for the items in the current document. Enter the actual customs amount. If the data in SAP Business One is accurate, this amount equals the value in the Expected Customs field. If the amounts are different, SAP Business One displays a window with an option to divide different amounts equally. Displays the total expenses amount of the current document. Displays the difference between the Total Expenses amount and the total amount recorded in the Costs tab. This difference might be created due to a manual allocation of costs for certain items or due to an automatic rounding made by SAP Business One during cost allocation calculations. Displays the reference numbers or the vendor numbers for the goods receipt PO used in the landed costs document, Displays the total amount excluding tax. Displays the overall amount of the document.
Landed Costs: Costs Tab To access the tab, choose Purchasing A/P
Landed Costs
Costs.
Definition Landed costs have to be allocated for items in order to calculate their real cost. Landed costs include the air or sea transportation, insurance, storage, and so on. To assign each imported item to its relevant landed cost, allocate these costs to the various items according to a certain criteria.
To ensure that the landed costs are allocated correctly, each Item Master Data record of imported items should contain the item's volume, weight and customs group. This tab consists of the Constant Costs the Variance Costs subtabs. If your company manages a perpetual inventory system, the V ariance Costs tab is disabled.
Costs Tab Fields
Field
Activity/Description
Landed Costs
Displays the landed costs name as defined in the Define Landed Costs window.
Allocation By
Displays the allocation method defined in the Define Landed Costs window for each landed cost.
Amount
Enter the expenses earned for this import. Enter the amount in the national currency. Change the entry in the landed costs general area to INR in case of imported GRN.
Factor
Displays the percentage ratio of each landed cost out of the total FOB costs of the shipment. This factor can help y ou to determine the shipment's efficiency in comparison with other shipments or with certain standards.
Recalculate
Choose to recalculate the landed cost amounts, if you have updated any data in the table.
Clear Table
Choose to reset all the landed cost amounts recorded in the table and to change the allocation methods back to their default values as defined in the Define Landed Costs window. Choose to open the Define Landed Costs window. If required, use this window to define additional landed costs while you process the document.
New Landed Costs
After allocation this will update Expenditure per unit cost in Item TAB as under.
Landed Costs: Details Tab To access the tab, choose Purchasing – A/P
Landed Costs
Details.
Definition Use this tab to find further information about the Landed Costs rows as under.
Landed Costs Details Tab Fields
Field
Description/Activity
Item
Displays the code of the item.To open the Item Master data click
Whse Price
Displays the warehouse price calculated for a single imported item after landed costs were allocated. This price is then updated in the selected price list according to the currency selected in the landed costs document.
Price List
Choose the required price list to update an item price in the selected price list. The selected price list will be updated according to the currency selected in the document. For example, if the Landed Costs document is displayed in your local currency, the item prices will be updated accordingly in the selected price list (and not by a foreign currency if one is defined for the vendor).
Expenditure
Select a value to determine whether to allocate landed costs for the Current row by clicking. If no costs are allocated to a certain item, the item's cost will be calculated as its FOB price plus the customs. Landed costs that were not allocated for such items will be allocated for the remaining items.
Inventory Valuation
Select a value to define whether to calculate the item's price in the inventory valuation reports by clicking.
Bill of Lading No.
Enter the number of the bill of lading attached to the landed costs document.
Transport Type
Choose a shipping type by clicking.. To define a new shipping type, choose Define New.
After Adding this Landed cost document then only Go to Journal Tab Landed Costs: Journal Tab To access the tab from the SAP Business One Main Menu, choose Purchasing – A/P Landed Costs Journal.
Definition This tab is available only in companies that manage stock in warehouses using perpetual inventory. After you create a landed costs document, use this tab to create a journal entry that reflects the landed costs amount (insurance, broker fee, transport, and so on). These landed costs update the moving average and the FIFO price of the imported items.
Landed Costs Journal Tab Fields
Field
Description/Activity
Trans. No.
Displays the number of the journal entry created for the landed costs.
Journal Remarks
Enter remarks for the journal entry. As a default, SAP Business One displays Landed Costs X where X is the document number. You can change this string, if required.
Custom Expenses
Select to include the total customs amount of the landed costs document in the journal entry. If the checkbox is not selected, the journal entry will include the total expenditure amount only.
Create Journal Entry
Create Journal Entry is enabled only when the current landed costs document has already been created.
Choose Create Journal Entry to open the Journal Entry window..
The system displays a row debiting the default Inventory account (from the Main Menu, choose Administration → Definitions → Financials → G/L Account Determination → Inventory tab) as under.
To complete the journal entry, choose an offsetting credit G/L account (e.g. Custom Duty a/c, Freight a/c etc.).
Very Important Note : We recommend that you create the Journal Entry before you release (i.e Goods Issue/ Issue to Production) any items to update their moving average/FIFO price, thus allowing a correct calculation of the release prices. II ) If you are creating Journal entry after Releasing of Partially Item Quantity Received. Purchase Order Goods Receipts PO AP Invoice Goods Issue / Issue To Production (Partially Quantity Issued of GRPO) Landed Cost. The system displays a row debiting the default Price difference account for Partial Quantity issued & The system displays a row debiting the default Inventory account for quantity not issued as under.
To complete the journal entry, choose an offsetting credit G/L account (e.g. Custom Duty a/c, Freight a/c etc.).
III) If you are creating Journal entry after Releasing of Total Item Quantity Received. Purchase Order Goods Receipts PO AP Invoice Goods Issue / Issue To Production (Full Quantity Issued of GRPO) Landed Cost. The system displays a row debiting the default Price difference account for Total quantity issued against GRPO as under.
To complete the journal entry, choose an offsetting credit G/L account (e.g. Custom Duty a/c, Freight a/c etc.).
Recommendation while accounting Additional Expenses incurred for Import 1.. Booking of Service Type AP Invoice by debiting the Clearing & Forwarding Charges account (Created under Current Laibility )
Clearing & Forwarding Charges A/c ……………………… Dr To Vendor A/c 2.. Landed Cost Creating Journal entry by displays a row debiting the default Inventory account & Crediting Clearing & forwarding a/c debited in AP Invoice (Service Type) used in above transaction.
Inventory A/c ……………………… Dr To Clearing & Forwarding Charges A/c
