INTUIT LANDED COST TUTORIAL: Quickbooks Enterprise Advanced Inventory

Introduction

This tutorial will guide you through the process of setting up and using the Landed Cost feature in QuickBooks Enterprise Advanced Inventory. Landed Costs allow businesses to account for additional costs associated with inventory items, such as freight, duties, and other charges, ensuring you know the true cost of your products.

Step 1: Update QuickBooks Software

• Ensure your QuickBooks Enterprise Platinum Edition is updated to the latest release (version 20 or higher).
• To update, go to the menu bar and select Help, then Update QuickBooks Desktop.

Step 2: Enable Advanced Inventory

• Navigate to Edit in the menu.
• Select Preferences.
• Click on Items and Inventory, then Company Preferences.
• Choose Advanced Inventory Settings and select the Landed Cost tab.
• Click on Setup Landed Cost Account.

Step 3: Create a Landed Cost Account

• You can create a new account or use an existing one. For this guide:
  • Create a new account called Landed Cost to Allocate.
  • Choose the account type as Other Current Assets for better balance sheet management.
  • For the description, enter Assigned vendor bills for freight, custom duties, and other charges.
  • Save and continue.

Step 4: Set Up Other Charge Accounts

• Ensure you have the following other charge accounts set up:
  • Shipping and Handling
  • Custom Duty
  • Insurance
• To create these accounts:
  • Go to the Chart of Accounts.
  • Click Add Item and choose Other Charge as the account type.
  • Name the account (e.g., Shipping and Handling).
  • Mark the item as used in assemblies or reimbursable.
  • Set the expense account to Landed Cost to Allocate.
  • Add a miscellaneous sales account and save.
• Repeat to create accounts for Custom Duty and Insurance.

Step 5: Map Shipping and Handling Items

• Return to Edit > Preferences > Items and Inventory > Company Preferences > Advanced Inventory Settings > Landed Cost Tab.
• Confirm that the three expense items (Shipping and Handling, Custom Duty, Insurance) are automatically mapped.
• Click on Manage Landed Cost Account and then Save and Continue.

Step 6: Enter Bills for Landed Costs

• Go to the Enter Bills section in QuickBooks.
• Create a new vendor (e.g., Duties R Us) and enter the bill details:
  • Date: (e.g., December 15, 2025)
  • Reference Number: (e.g., 123)
  • Amount: (e.g., $1000)
• In the Items section, select the Other Charge account and enter Custom Duty with the amount ($1000).
• Save the bill.

Step 7: Calculate Landed Costs

• To allocate the landed cost:
  • Click Calculate Landed Cost.
  • Select the bill you created and check the box to allocate the costs.
  • Choose the allocation method (Quantity, Percentage, or Manual).
• For Quantity, QuickBooks will calculate the percentage based on the total quantities of items involved.
• Input the amount to allocate (e.g., $500) and ensure it totals correctly across the items.
• Click Post to Bill once satisfied with the allocation.

Step 8: Review and Save Transactions

• After posting, verify the updated landed costs:
  • Use Control + Y to view journal transactions.
  • Check that the inventory asset account is debited and accounts payable is credited accordingly.
• Save the transaction to finalize the updates.

Conclusion

You have now successfully set up and managed Landed Costs in QuickBooks Enterprise. This feature provides accurate inventory cost accounting, which is crucial for financial reporting and inventory management. As a next step, consider reviewing your inventory valuation reports to see how these changes affect your overall financials. For further assistance, explore more QuickBooks tutorials or reach out for professional consulting services.