Landed cost in Sage 300 ERP

By | April 11, 2013

Maintaining landed cost for products that company handles can be a very crucial task. Landed cost is the total cost of product once it arrives at the buyer’s door. All trading or manufacturing companies involved in import or exports of products need to understand the total cost of goods they have bought and need to device their margins based on it.
In order to calculate landed cost, all factors beyond primary cost of material must be considered and accounted for; so that proper costs are updated and made available for decision making.
Calculation of landed cost is important to find out cost to company and to decide what price it can be sold for.
Following is the list of costs, needed to be calculated in the landed cost;

>> Original cost of product
>> Excise, Custom duties, Inspection and Clearance
>> Shipping cost
>> Tariffs and taxes
>> Insurance
>> Currency conversion
>> Brokerage and Handling fee

These are some common examples of additional costs, but there can be more based on industry.
Also Read: Reducing Transit Variances Losses using Sage 300 ERP
In Sage 300 ERP (formerly Sage Accpac ERP), users can track landed cost of product with the functionality of Additional cost in Purchase order Module. Users can also create all the above-mentioned costs other than original product cost in PO Setup >> Additional costs.
Users can then prorate additional cost factor over the original product cost based on following proration methods.

>> Prorate by quantity
>> Prorate by cost
>> Prorate by weight
>> Prorate manually

Users can expense out the additional cost by selecting no proration also. This way Sage 300 ERP helps users to add additional costs and arrive at Landed cost.
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