Before you can track landed costs, you'll need to set up some accounts and inventory items.

Accounts

You'll need to create Cost of Sales accounts to track each landed cost (Accounts > Accounts List > Cost of Sales tab > New). It's a good idea to organise these accounts under a header account called Landed Costs to help keep your accounts list organised.

Depending on the landed costs applicable to you, the accounts you need to create will vary. For example, if you incur freight charges you'll need a Cost of Sales account for freight. You might also need to check with your accounting advisor about the applicable tax/GST code to use for these accounts.

In our example below we've created 4 new accounts:

• a Landed Costs header account
• two detail accounts for specific landed costs (freight and customs/port charges) - you can create other accounts if needed
• a detail account (Landed Cost Adjustment) - this account is used to allocate your landed costs when purchasing imported goods

Inventory

First, make sure you've set up the inventory items which you'll be importing (Inventory > Items List > New). Then, create an inventory item to use for tracking landed costs when recording an overseas purchase.

When creating this item:

• Name the item Landed Cost Adjustment
• Select the option I Buy This Item
• For the Expense Account for Tracking Costs, select the Landed Cost Adjustment account created above

You can easily set up a spreadsheet with some basic formulas to calculate the landed cost of your purchased items. This will provide the landed cost per unit for your purchased items which you'll need when recording the purchase in AccountEdge (in the next task).

Here's an example spreadsheet for items imported from the US, but you can customise this spreadsheet to suit your needs. 

Here's the same spreadsheet with the formulas displayed.

Now that you've calculated your landed costs and AccountEdge has been set up, you're ready to enter a purchase for the imported items at full landed cost (Purchases > Enter Purchases).

For each purchased item:

• enter the purchased quantity in the Bill column
• enter the Price based on the landed cost per unit calculated in the previous task. In our example below, notice the Price for each item is the same as the landed cost per unit in the calculation spreadsheet.

On a separate line:

• select the Landed Cost Adjustment item. This will be used to track the landed costs.
• enter zero in the Bill and Price columns
• enter the Total of the landed costs as a negative value. This ensures the landed costs are not included in the total purchase price.

As you receive invoices for the actual landed costs, you can create a bill for each (Purchases > Enter Purchases).

• Use the Service layout so you can describe what the bill is for.
• Allocate the cost to the applicable Cost of Sales account (which you created earlier).

Here's our example bill for freight costs: