Landed Inventory Cost in QuickBooks Enterprise
3 min read
5 months ago
Published on Aug 01, 2024
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Table of Contents
Introduction
This tutorial will guide you through the process of managing landed costs in QuickBooks Enterprise, specifically using the Platinum Edition's advanced inventory features. Understanding how to allocate additional costs like shipping, customs, and insurance to your inventory can help ensure accurate pricing and profitability.
Step 1: Enable Landed Cost Feature
- Open QuickBooks and navigate to the Edit menu.
- Select Preferences.
- Go to the Items and Inventory section.
- Click on Company Preferences and enable Landed Cost.
- You will be prompted to select or create an Other Current Asset Account as a clearing account for shipping expenses. Name it Clearing Landed Cost Account.
- Click Save and Close.
Step 2: Create Landed Cost Items
- Go to the Lists menu and select Item List.
- Create items for each of the landed cost components:
- Shipping:
- Set as an Other Charge.
- Choose Clearing Landed Cost Account as the expense account.
- Customs Duties:
- Create another item pointing to the same clearing account.
- Ensure it’s not a double-sided item.
- Insurance:
- Create this item similarly, ensuring it points to the clearing account.
- Shipping:
- Save each item.
Step 3: Create Inventory Items
- Still in the Item List, create your inventory items:
- Widget 1: Cost of $50, Sales price of $100.
- Widget 2: Cost of $100, Sales price of $180.
- Widget 3: Cost of $15, Sales price of $25.
- Save each inventory item.
Step 4: Enter Bills for Landed Costs
- Go to the Vendors menu and select Enter Bills.
- Enter bills for shipping, customs, and insurance:
- Example for Shipping: Bill from DHL for $5,000.
- Example for Insurance: Bill from Freight Insurance Company for $2,500.
- Example for Customs: Bill from US Department of Customs for $1,800.
- Save each bill.
Step 5: Allocate Landed Costs to Inventory
- Go back to the bill that contains your inventory items.
- Click on the Calculate Landed Cost button.
- In the new screen, click Add Bills to select all relevant bills.
- Allocate the costs as needed:
- You can allocate by quantity, percentage, amount, or manually.
- Enter the amounts to allocate for each item and ensure the total matches the cost you want to distribute.
- Click Post to Bill.
Step 6: Update Selling Prices
- After posting the landed costs, QuickBooks will prompt you to update selling prices based on the new costs.
- Manually enter the new selling prices for each item.
- Click Update to apply these changes.
Step 7: Review Inventory Valuation
- Navigate to the Reports menu and select Inventory Valuation Summary.
- Review the updated costs and ensure they reflect the landed costs accurately.
Conclusion
You have successfully enabled and managed landed costs in QuickBooks Enterprise. By accurately allocating additional costs to your inventory, you will maintain correct pricing and profitability. For further assistance, consider reaching out to QuickBooks support or consulting with professionals like Hector Garcia CPA.