ANSWER ID:30773

Landed costs are the total cost of an imported shipment including, but not limited to, the purchase price, freight, insurance, and other costs up to the port of destination. In some instances it may also include the customs duties and other taxes levied on the shipment.

Your MYOB software cannot automatically calculate or apportion landing costs to individual line items. The process described in this support note is a workaround to ensure that:

• Stock on hand is valued at full landed cost
• Cost of Sales reflects landed cost of stock sold
• Actual landed costs can be easily identified

Setup landed cost accounts

Landed costs need to be allocated to specific accounts in your software. To enable this allocation, the accounts need to be setup in your software's accounts list.

1. Go to the Accounts command centre and click Accounts List.
   
2. Click the Cost of Sales tab.
   
3. Click New.
   
4. Create the applicable Landed Costs header and details accounts (as applicable) as shown in the following image.
   

Note: Other landed costs accounts may be set up if required.

Setup inventory items

Your inventory items will already be set up in your software as shown in the following example:

A new Landed Cost Adjustment inventory item must be created which will be used when entering imported purchases into your software.

Create the Landed Cost Adjustment inventory item as follows:

1. Go to the Inventory command centre and click Items List.
   
2. Click New.
   
3. Create the Landed Cost Adjustment inventory item as shown in the following image:
   

Note: Ensure the item is allocated to correct Expense Account for Tracking Costs. Refer to your accountant for more information.

Create an Excel spreadsheet to calculate the landed costs

The example Excel spreadsheet shown below allows the landed costs of individual items to be calculated for individual purchased items.

Below is the same spreadsheet with the required formulas displayed.

Enter a purchase for imported goods (minus landed costs)

The following steps describe how to enter a purchase for the imported items at full landed cost. By adding the Landed Cost Adjustment inventory item as a negative value, the landed costs will not be included in the total purchase price.

1. Go to the Purchases command centre and click Enter Purchases.
   
2. Enter your purchase similar to the example shown below - include the Landed Cost Adjustment item as a negative value.
   

Note: There may be a rounding amount as in our example ($0.19) - just leave as is.

Enter purchases for landed cost items

As invoices are received for actual landed costs, enter these using service purchases and allocate to the respective cost of sales accounts as shown in the following example: