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When you set up the Landed cost module, you can define several sets of common values and related settings for each value. You can then use these values when you select specific types of costing parameter values in other parts of the app. This article explains how to set up these sets of values.
Set up cost type codes
Cost type codes determine the type of cost that you incur when goods arrive at the warehouse, or the landed costs of the voyage. Although they usually increase the value of the goods, you can also use them to accrue amounts into the ledger. Use ledger adjustments when you accrue a cost over time or during a series of voyages and offset it in a single transaction.
Note
If you share the cost type table across legal entities, you must also share the chart of accounts across legal entities. Otherwise, the posting transactions don't work correctly.
To set up your cost type codes, go to Landed cost > Costing setup > Cost type codes. Use the buttons on the Action Pane to create new cost type codes, edit existing codes, or delete a selected cost type.
The following table describes the fields that are available for each cost type code.
| Field | Description |
|---|---|
| Cost type code | Enter a name for the cost type code. |
| Description | Enter a description of the cost type code. |
| Use shipping rate | Set this option to Yes if the voyage exchange rate (sometimes referred to as a management rate) must be used to calculate the value of these costs. In this case, the shipping rate is used instead of the standard default or spot exchange rate to exchange foreign currency invoices. |
| Reporting category | This field establishes a reporting category for the cost type. You can print reports either by reporting categories or by cost type. |
| Debit type | Select whether the cost type should debit the item, the ledger account, or the vendor. |
| Debit posting | If you set the Debit type field to Ledger account, select the posting description. |
| Debit account | If you set the Debit type field to Ledger account, select the ledger account to use. |
| Credit type | Select whether this cost type should credit the item, the ledger account, or the vendor. |
| Credit posting | If you set the Credit type field to Ledger account, select the posting description. |
| Credit account | If you set the Credit type field to Ledger account, select the ledger account to use. |
| Clearing account | Select the clearing account for the cost type. Specify a separate clearing account per cost type to help with reconciliation. |
| Standard cost posting type | If you're using standard costing, select the posting description. |
| Standard cost variance account | If you're using standard costing, the account that you specify here is used to post any variance. This account uses the landed cost breakdown on the Item prices page. This breakdown is created by using the periodic routine to update prices. For example, the standard cost of an item is $15.00, the FOB is $13.00, and the freight is $2.00. When you receive the invoice for the stock, you receive the item at $15.00, but there's a standard price variance of $2.00 for the item, because the actual FOB is $13.00. This variance is posted to the standard price variance account that is set up in the item posting profile. Because the estimated freight is $2.00, there's no variance when the stock invoice is posted. However, when you receive the invoice for freight, the freight is $2.50 per unit. Therefore, a $0.50 variance is posted to the specified cost. |
| Moving average variance account | If you're using moving average costing, the account that you specify here is used to post any variance. For example, the estimated freight is $2.00. However, when you receive the invoice for freight, the freight is $2.50 per unit. Therefore, a $0.50 variance must be posted. When you set the Post adjustments as variance option to Yes on the Landed cost parameters page, all variances between estimated and actual shipment costs are posted to the moving average variance account that you specify here. When you set the Post adjustments as variance option to No, standard functionality is used, and the variance is applied either to inventory or to the moving average variance account that you specify here, depending on stock on hand. |
| Charge accrual account | Select the account that is used to accrue for cost estimates when the purchase invoice is posted. This field is used only when the Use cost type charge accrual account option is set to Yes on the Costing FastTab on the General tab of the Landed cost parameters page. |
| Charge account | Select the account that is used to capture the inbound transportation costs that a supplier invoiced. The amount is posted as a debit. The offset account is the stock variation account. This posting is used only when the Post to charge account in ledger option is set to Yes on the Accounts payable parameters page. |
| Variance account | The account that offsets the charge accruals when the purchase invoice is posted. This field is used only when the Use cost type charge accrual account option is set to Yes on the Costing FastTab on the General tab of the Landed cost parameters page. |
Vendor cost type groups
Vendor cost type groups help determine how auto cost charges are found and applied to a voyage. Vendors that have similar import costs are linked together. For example, all vendors from emerging markets pay the same duty percentage for the same type of product that they purchase from an established market.
You can maintain vendor cost type groups by going to Landed cost > Costing setup > Vendor cost type groups. The Vendor cost type groups page provides a grid that lists all existing vendor cost type groups. You can use the buttons on the Action Pane to add, remove, and edit rows in the grid.
The following table describes the fields that are available on each row in the grid.
| Field | Description |
|---|---|
| Vendor cost type groups | Enter a unique name for the vendor cost type group, such as Emerging markets. |
| Description | Enter a description of the vendor cost type group. This description can provide details about the level or type of charge that is associated with the vendor group. |
Item cost type groups
Item cost type groups help determine how auto cost charges are found and applied to a voyage. Similar items are linked together. For example, all items that have a duty rate of 5 percent might belong to a specific cost type group.
You can maintain item cost type groups by going to Landed cost > Costing setup > Item cost type groups. The Item cost type groups page provides a grid that lists all existing item cost type groups. You can use the buttons on the Action Pane to add, remove, and edit rows in the grid.
The following table describes the fields that are available on each row in the grid.
| Field | Description |
|---|---|
| Item cost type groups | Enter a unique name for the item cost type group, such as Duty 5%. |
| Description | Enter a description of the item cost type group. This description can provide details about the level or type of charge that is associated with the item group. |
Note
The item cost type links to the item through the Cost type group field on the Purchase FastTab of the item's Released product page.
Transfer order cost type groups
Transfer order cost type groups help determine how auto cost charges are found. Similar items are linked together. For example, all items that have a duty rate of 7 percent might belong to a specific cost type group.
You can maintain transfer order cost type groups by going to Landed cost > Costing setup > Transfer order cost type groups. The Transfer order cost type groups page provides a grid that lists all existing transfer order cost type groups. You can use the buttons on the Action Pane to add, remove, and edit rows in the grid.
The following table describes the settings that are available on each row in the grid.
| Field | Description |
|---|---|
| Transfer order cost type groups | Enter a unique name for the transfer order cost type group, such as Duty 7%. |
| Description | Enter a description of the transfer order cost type group. This description can provide details about the level or type of charge that is associated with the transfer order cost type group. |
Note
The transfer order cost type links to the item through the Transfer order cost group field on the Purchase FastTab of the item's Released product page.
Cost templates
Use cost templates to set default values for settings that users who get the cost estimate might not know. Cost templates can help reduce complexity in the estimation process by minimizing the selections that users must make to get an accurate estimate.
To work with cost templates, go to Landed cost > Costing setup > Cost templates. On the Cost templates page, the list pane on the left shows all current cost templates. Use the buttons on the Action Pane to add, remove, and edit templates.
The following table describes the settings that are available for each template.
| Field | Description |
|---|---|
| Cost template | Enter a unique name for the cost template. The name typically describes the factor or cost multiplier for the template. |
| Description | Enter a description of the cost template. |
| Shipping company | Select the vendor account of the shipping company to associate with the cost template. |
| Mode of delivery | Select the mode of delivery that the cost template should use when the estimated cost of an item is calculated. This field helps determine the auto costs that are associated with the goods on the cost estimate. |
| Shipping container type | Select the type of shipping container type to associate with the cost template. This field helps determine the auto costs that are associated with the goods on the cost estimate. |
| Customs broker | Select the customs broker (vendor) to associate with the cost template. This field helps determine the auto costs that are associated with the cost estimate. |
| Factor | Enter a factor to apply to the final cost estimate of goods. For example, to add 10 percent to the calculated cost estimate, enter 1.10. |
Volumetric divisors
Use volumetric divisors to calculate the volumetric weight. Each shipping or freight company sets its own volumetric divisors. In addition, a company's divisors usually vary depending on the mode of delivery. For example, air and sea often have very different divisors. A company can also make its rules more complex depending on where it ships from. The system uses the following formula to find the volumetric weight: VolumetricWeight = Volume ÷ VolumetricDivisor.
For example, a package that you send by air has a volume of 3 cubic meters (m³). The company charges by volumetric weight and applies a volumetric divisor of 6. This divisor divides the volume to determine the volumetric weight. Therefore, the volumetric weight for this example is 3 ÷ 6 = 0.5 kilograms (kg).
To set up volumetric divisors, go to Landed cost > Costing setup > Volumetric divisors. The Volumetric divisors page provides a grid that lists all existing volumetric divisors. You can use the buttons on the Action Pane to add, remove, and edit rows in the grid.
The following table describes the fields that are available on each row in the grid.
| Field | Description |
|---|---|
| Shipping company | Select the vendor account of the shipping company that you want to associate with the volumetric divisor. |
| Cost type code | Select the cost type code that you want to associate with the volumetric divisor. Use this field to put cost types into reporting buckets. You can print reports either by reporting categories or by cost type. |
| From port | Select the "from" port that you want the volumetric divisor to apply to. |
| Volumetric divisor | Enter the volumetric divisor value that you want to apply to the row. The volume of each package is divided by this value to determine that package's volumetric weight. |
Note
The system uses the maximum value between actual weight and volumetric weight.