Define discrete landed costs for a purchase order line on an inbound shipment

Discrete costs can be defined in the following routines:

in the Work with purchase orders program, where they can be calculated automatically when the order line is entered. see Define landed costs on a purchase order line.
in the Work with purchase orders program, where they can be manually defined. See Define landed costs on a purchase order line.
when the reception note is confirmed via the Confirm purchase order reception note menu item.
in the Work with inbound shipments program, which is described below.

A typical example of a discrete cost is import duty. This is almost universally calculated as a variable percentage of the total costs incurred in bringing the goods to the point of entry. The percentage being dependent upon the commodity code and from where the goods were imported.

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/change 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 the goods into stock and update the costs and statistics for a shipment.

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

For the purpose of this example, the following will be done:

Cost of import duty for two items included in the shipment will be checked/defined.

For the first item a matching record exists in the Landed cost table, and the cost was automatically calculated when the order was entered in the Work with purchase orders program. You will only check the calculation of the cost. Refer to steps 1 through 5.
For the second item no matching record exists in the Landed cost table. This means that the cost could not be calculated at order entry. You will define the information manually. Refer to steps 6 through 9. Note: The reason why the record does not exist in the Landed cost type table can, for example, be that the item is new and has, mistakenly, not been updated in the Landed cost type table.

Select the Work with inbound shipments menu item.
Mark the shipment for which you want to define discrete costs and click Lines.
On the Lines panel, mark the applicable purchase order line and click Costs.
You access Work with landed costs. For this item the cost has been calculated (or defined) at order entry. In steps 4 and 5 you will check that the cost is calculated correctly, without doing any changes. The following information is displayed:

Discrete: Displays the total discrete cost for the order line.
CC: For the purpose of this example, this column is set to NO denoting that the items on this order line do not require a cost check.

View calculation
To view how the cost is calculated, select the cost and click Change disc cost.

You access Order line landed costs.

Cost alloc method: Displays PC, meaning that the cost is calculated as a percentage of the net purchase value. Refer to step 6 below. For the purpose of this example, the cost allocation method PC is defined for the landed cost type DUTY in the Landed cost type table.
Percentage: Displays the percentage to use when calculating the cost. For the purpose of this example, the discrete cost is 3,5 % of the net purchase value. Refer to step 6 below.
System value: Displays the calculated cost in system currency. Refer to step 6 below.

Click Line summary to view details about the cost calculation.

You access Order line landed cost summary. This panel is divided into two parts. In the upper part the following field, amongst others, is displayed:

Purchase price

Displays the purchase price, expressed in the currency shown in the Currency field, per purchase unit.

In the bottom part, three columns are displayed: Purchase unit, Stock unit and Extended.

Purchase unit column
The calculated values (shown to the left) are displayed for the purchase unit in system currency.

Stock unit column
The values are displayed for the stock unit in system currency.

Extended column
The following is displayed (in system currency):
- value below Purchase unit * Quantity shown below the Purchase unit column
which is the same as:
- value below Stock unit * Quantity shown below Stock unit
For the purpose of this example, the Net price in the Stock unit is 4204,32. The quantity expressed in the Stock unit is 4. The Extended value is 4204,32 * 4 = 16817,28

Line landed cost
This is the sum of the distributed and discrete costs for the line, calculated as:

Discrete cost:
Value in Percentage field (see previous step) * Net price (in system currency)

In this example: 3,5 % * 16817,28 = 588,6048 rounded to 588,61.

Distributed cost:
In this example no distributed costs are defined.

Total landed cost
This is the total landed cost for this order line, calculated as the sum of the line landed costs, plus the net purchase price.
Line landed costs + Net price

In this example: 588,61 + 16817,28 = 17405,89

What to do next
Return to the Lines panel.
On the Lines panel, select the second order line and click Costs to add the cost manually.
You access Work with landed costs. Since no matching record was found in the Landed cost type table when this order line was entered, no cost has been calculated automatically. Click Add disc cost.
You access Order line landed cost. The following fields are defaulted automatically:

From country
To country
Supplier
To warehouse
Manner of transport
Shipping agent: Only defaulted if a shipping agent is defined for the dispatch address on the purchase order.
Item shipment group: Only defaulted if defined in the Item file.
Commodity code: Only defaulted if commodity code is defined on the purchase order line.
Item
Fixed rate

For the purpose of this example, complete the following field (which is mandatory):

Landed cost type: Enter the landed cost type which controls how the cost will be calculated. For this example, enter the same type as for the first line, i.e. DUTY.

Click OK.

The same panel is displayed with a message at the bottom. This message is displayed because no matching record was found in the Landed cost type table. Complete the following fields to define the cost manually:

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.
Cost alloc method: For this example enter PC, meaning that the cost is calculated as a percentage of the net purchase value.
Percentage: Enter the percentage to be use when calculating the cost. In this example enter 3,5. The cost will be calculated as 3,5 % of the net purchase value.
Transaction currency: Enter the currency in which the cost will be expressed on the invoice sent by the vendor.
VAT based: Set to YES if this is a VAT based transaction. Tip: The VAT handling code 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 to YES if the VAT is included in the transaction amount.

Click OK to update.

You return to Work with landed costs and the new cost is updated for the order line. 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 discrete costs for each of the order line by repeating the steps outlined in this document.
define distributed landed costs for the shipment. See Define distributed costs on an inbound shipment.
close all receipts for the shipment. See Close all receipts on an inbound shipment.

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