We have a purchase order set up for a number of truckloads of ingredients. After the product was received I learned that we will be paying additional freight on product received under this PO. And it will be to 4 different truckers. So how do you show freight on a PO such that it adds the cost of the freight to the product when it is received? Now that we are doing this after the fact, how to you recommend setting it up to pay? How do I best adjust the ingredient cost for these loads? Thanks!!
—————————— Teresa Waters Controller La Crosse Milling Company Cochrane WI ——————————
Thaddeus Suter
Member
March 3, 2021 at 10:18 AM
Before the fact, you want to create Landed Cost IDs and Landed Cost Groups and attach these LC Groups to your Item Quantity Sites record where you want to accrue the delivered costs into the Item and Inventory upon Receipt. This is done under Inventory Cards. The LC Group can be set up to accrue Duties, Freight (Air, Ocean etc), Brokerages, Handling and so on for specific Vendors by different methods such as % of cost or flat $ per unit and soon. With and without specific Vendor Invoice matching. It is best to use a specific Landed Cost Clearing account (one or more) on the balance sheet for this unless you decide to post all LC credits directly to a Freight Expense P/L account where the account clearing maybe becomes less important.
After the fact, your best bet is to adjust Item Cost using Utilities Inventory Adjust Costs. This process will adjust the received Items inventory cost and create a journal entry that will debit the inventory account and credit the Inventory Offset account from the Item Card. So make sure you post your vendor invoices debit to the Inventory Offset Account for the Item card so that the costs clear.
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