Landed cost is often an issue to deal with when setting up a system for a company that does a lot of importing. The main aim here is making sure the costs into the value of inventory instead of just expensing these additional charges. It’s often a troublesome set of events because you purchase goods and there are certain fees and charges that you know and can calculate when the purchase is placed but then there are other fees that might change or you don’t know the value of until you get the invoice from the shipper, freight forwarder, government etc.
Then there is often the issue of timing. You place a purchase order, good arrive. Then you might not get an invoice for freight or duties for a month or more after the receipt of the goods. This is then difficult because you might have sold those goods already.
In heavy import business there are some good ISV’s that provide landed costs solution on top of Dynamics AX. These solutions are great if you also want to add optional handling of shipments for example tracking sea shipment with containers numbers and splitting those one containers costs against multiple purchases. If you have the occasional import you could work around with some setup. Now this may not be optimal for some based on handling estimated changes and what to do with the adjustment and review of the actual charges so it’s something you will have to work through in your business.
It’s also worth noting this example is worked through without using the transportation module that was introduced in AX2012 R3 and is in D365. This functionality could be added to the process to add extra invoice handling processes. It still works with the charge codes so it is a variation that I’ll cover in a follow-up post.
Common charges that come with shipping that might need to be considered in you landed cost evaluation for your inventory. These are just a sample often different goods will have different charges and you should also evaluate accounting standards for what you can and can’t include in the value of inventory and what should just be expensed.
Let’s set some goals here to constrain the scope of what would could achieve with a simple landed cost setup.
In this example we are making use of a few setups.
The attached video gives a walkthrough of how it could fit together.
AX2012 R3 CU11
In a follow-up we’ll have a look at and adjustment process.