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Calculating Landed Costs for Imported Goods Locate this document in the navigation structure


When importing goods, companies incur certain additional costs, such as customs, transport and insurance fees, or taxes. These additional costs can be allocated to the imported items and reflected in the accounting system using the Landed Costs function in SAP Business One.

If your company runs a perpetual inventory system, creating the landed costs document automatically posts a journal entry in the accounting system. The journal entry updates the moving average and the FIFO price of the imported items.

If your company does not run a perpetual inventory system, creating the landed costs document does not post a journal entry in the accounting system.



Documents relevant to the import process are in the Purchasing - A/P module:

Purchase order

Goods receipt PO

A/P invoice

Landed costs

  1. You create a purchase order for a vendor abroad.

    Optional: You create a purchase order for a vendor abroad in exactly the same way you would create a purchase order for one of your local vendors. When you create a purchase order, SAP Business One updates the available stock quantity of the ordered items.

  2. You create a goods receipt purchase order (PO).

    The goods receipt PO creates an inventory receipt transaction and is recorded in the same manner as a goods receipt PO from a local vendor. SAP Business One uses the goods receipt PO as the base reference for the entire import process; therefore, you must specify the item prices and quantities correctly.

    Note Note

    The item prices you specify in the goods receipt PO document are the vendor's prices (Ex Works or FOB price), excluding the additional costs, which are allocated later for the entire shipment.

    The total amount of the goods receipt PO should be the overall expected price your vendor charges you for the shipment, excluding the additional costs you must pay other parties, such as your customs broker.

    End of the note.
  3. You create an A/P invoice.

    To complete the accounting transaction of the import process, create an A/P invoice (item type) based on the goods receipt PO as soon as you receive the vendor’s invoice. Create the A/P invoice the same way that you would create an A/P invoice sent from one of your local vendors. You can create the A/P invoice at any time and regardless of the date when you actually record the landed costs document.

  4. You create a landed costs document.

    To update the cost price of the imported items, you can create a landed costs document based either on a goods receipt PO, an A/P invoice, or on another landed costs document. This is required if you want to reflect accurately the additional costs associated with the imported inventory valuation and calculating the gross profit, or any other inventory-related calculation. Typically, you can create the landed costs document after you receive invoices from your customs broker or shipping agency, but it is possible to use this method to include estimated landed costs prior to official documents being received.