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Overview
FIFO Costing Method
Inventory costs are manually adjusted for currency conversion rates and a “standard” markup for shipping costs (includes duties, insurance, etc.). This is done every time they make a purchase or receive a price list
Bulk purchase discounts; discounts often appear on a separate line and aren’t always automatically factored into the cost calculations within the system
For truckload purchases, an average shipping cost of 5–10% is added manually to each item. This shipping cost is often recorded separately and is not part of the vendor’s invoice, which requires an additional step to account for it
Landed cost discrepancy of about 10% between the cost recorded in the system and the actual landed cost at the end of the fiscal year, due to applying a standard markup to cover shipping costs rather than calculating it on a per-item or per-project basis
Requirements
Landed Cost Configuration
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Configure the landed cost fields to capture shipping, insurance, and other potential costs
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Standard 10% markup for now
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Set up accruals for landed costs when invoices are received at a later date
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Fencescape uses FIFO for inventory costing. A standard 10% markup is added to each item to capture shipping costs, duties and insurance. Certain items offer bulk purchase discounts.
Requirements
Configure landed costs to allocate based on line cost of the Warehouse Receipt, rather than Quantity
Set Up Accrual Landed Costs
Standard 10% markup for now
Setup Accrual GL Account; 2306 Accrued AP Landed Costs
Setup Landed Costs Service Item; Z-Landed Costs
Configure Account Posting Setup record for Service Item; APS-0000003
Update Company Extended Setup with the Accrual GL Account and Service Item
Define estimated % landed cost on inventory items
GORILLA FENCE (green teak):GFHPGT108
GFPPCGT
GFUCGT96
GF2015 Landed Cost Accrual vs. Actual