We are working with an opportunity that frequently sells/invoices items before the landed costs are known and recorded. The costs flow to the ledger fine, but they are wanting the margin reporting on the sales to reflect the additional costs that should be attributed to the items sold.
Solved
How do we get Landed Costs reflected in Sales Margin reporting when costs are recorded after invoicing?
Best answer by Steve Milner
@randylush Out of the box they won't. The Sales Profitability reports (AR672000 and its siblings) sum the cost stored on each invoice line when the invoice releases. A landed cost released after that never touches the line. For the share already sold, the landed cost adjustment posts to the Landed Cost Variance account instead of inventory. FIFO, Average and Specific all do this once units are issued, and Standard cost goes to variance every time. Your GL margin is fine if Landed Cost Variance sits in the COGS section of the P&L. The per-invoice and per-customer margin stays understated.
The fix is to get the cost onto the receipt before the item ships. Enter a landed cost document on Landed Costs (PO303000) at receipt time with an estimated amount and leave Create Bill cleared. The inventory adjustment releases, the estimate goes into unit cost, and the sales invoice picks it up. When the actual freight or duty bill arrives, use Add LC on the AP bill and correct the amount there. Only the difference between estimate and actual hits variance, which is what that account is for. chrisgold runs exactly this with a standard rate card in this thread: https://community.acumatica.com/distribution-6/landed-cost-dont-apply-for-sold-item-22996
If your client can't estimate, the only other lever is holding the invoice release until the landed cost lands, which rarely works operationally.
Laura03's walkthrough of the valuation-method behavior: https://community.acumatica.com/distribution-6/question-about-landed-cost-adjustment-11145
+6@randylush Out of the box they won't. The Sales Profitability reports (AR672000 and its siblings) sum the cost stored on each invoice line when the invoice releases. A landed cost released after that never touches the line. For the share already sold, the landed cost adjustment posts to the Landed Cost Variance account instead of inventory. FIFO, Average and Specific all do this once units are issued, and Standard cost goes to variance every time. Your GL margin is fine if Landed Cost Variance sits in the COGS section of the P&L. The per-invoice and per-customer margin stays understated.
The fix is to get the cost onto the receipt before the item ships. Enter a landed cost document on Landed Costs (PO303000) at receipt time with an estimated amount and leave Create Bill cleared. The inventory adjustment releases, the estimate goes into unit cost, and the sales invoice picks it up. When the actual freight or duty bill arrives, use Add LC on the AP bill and correct the amount there. Only the difference between estimate and actual hits variance, which is what that account is for. chrisgold runs exactly this with a standard rate card in this thread: https://community.acumatica.com/distribution-6/landed-cost-dont-apply-for-sold-item-22996
If your client can't estimate, the only other lever is holding the invoice release until the landed cost lands, which rarely works operationally.
Laura03's walkthrough of the valuation-method behavior: https://community.acumatica.com/distribution-6/question-about-landed-cost-adjustment-11145
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Thanks Steve! For some reason that I’ve been unable to get them to reveal, they are really opposed to estimating the landed costs at time of receipt. They’ve got to have some history, so I really like the idea of creating a rate card as suggested in the post you referenced from chrisgold. That takes some of the guess work out of it for them, and at least gets a typical cost applied to the item before it gets sold. Thanks!
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