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Landed Costs - Managing different shipping methods

  • 1.  Landed Costs - Managing different shipping methods

    TOP CONTRIBUTOR
    Posted 7 days ago
    I'm new to landed costs, and trying to set up for a company we just migrated to GP.  They are a wholly owned subsidiary of our company, so they purchase product only from us...so only one vendor to deal with.  The valuation method for the inventory is Average Perpetual.  We ship to them mostly via Ocean freight, with the same logistics company...let's call that vendor Oceans11.

    I have created a Landed Cost detail record "Oceans11" which uses a % of cost allocation method to set up the landed cost for matching.  That detail record is part of (the only member of) a Landed Cost Group called "Freight".  That landed cost group is assigned to all parts.

    Everything seems to work OK.  When we issue POs and post receipts, the system is accruing the landed cost at the %.  I can match the invoices from Oceans11, and any variance is correctly being reallocated to the inventory cost.

    Here is my problem/question...we sometimes also ship to them via Air...using vendor "Air23."  I could create a Landed Cost Detail for Air23, and add it to the Freight Landed Cost Group.  But if I do that, the accrual gets posted every time.  I would then need to somehow clean up the accruals...both in the "match" subledger and the general ledger for which ever vendor was NOT used for any given shipment.

    How can I set this up to avoid that clean up?  Should I remove the Landed Cost Group from all items, and instead only assign them at the PO level manually?  If I go that route, I would create two different Landed Cost Groups, i.e. Ocean Freight and Air Freight?

    I think I just answered my own question by explaining this...so I'm gonna go try it.  But if anyone knows the correct way to handle this so I don't spin my wheels I would welcome the guidance!

    Thanks in advance for your help!

    ------------------------------
    Richard Ward
    Vice President - Controller IPD
    Storm Industries, Inc.
    Torrance CA
    ------------------------------


  • 2.  RE: Landed Costs - Managing different shipping methods

    TOP CONTRIBUTOR
    Posted 6 days ago
    You have it correct. Create two or more LC Groups as needed:
    1. LCOCEAN
    2. LCAIR (1 Day air)
    3. LCXXXX... (2 Day, 3 Day air)
    Add the Required LC IDs to each for Commissions, Duties, Insurance, Ocean Freight or Air Freight red blue etc. but not both.
    Assign the most common LC Group at the Item Quantities Site Maintenance this is the default LC Group.
    On entering the PO the Buyer will get the default Group LCOCEAN but can change it to LCAIR if they expedite the PO.
    If the Buyer misses it on the PO, the Receiver can still change the LC Group during Transactions Receivings Entry to reflect the correct method of transport and LC costs.
    Unfortunately, there is no method to link the LC Group to Item, Site and Ship Method.Only to Item and Site.

    ------------------------------
    Thaddeus Suter
    Retus, Inc
    HELOTES TX
    ------------------------------



  • 3.  RE: Landed Costs - Managing different shipping methods

    TOP CONTRIBUTOR
    Posted 6 days ago
    Depending on the scale of your operations you can get a bit fancier.

    We created a Site called AIRPORT and a Site called PORTSC.

    Item POs were created and were then received at the AIRPORT or PORTSC and had either LCAIR or LCOCEAN applied at that time through the LC PO and Receipts process.

    The Items were then Shipped  by inland freight to the distribution warehouses (SITES)  after clearing customs using an Intransit Transfer with a intermediate site called INTRANS.

    And then Received again at the final destination warehouse (Site).

    We applied an LC Cost for Inland Freight at both PO Receipts: AIRPORT and PORTSC.

    ------------------------------
    Thaddeus Suter
    Retus, Inc
    HELOTES TX
    ------------------------------