Financials for Office 365 LANDED COST HOW-TO PAPER VERSION 3.0 Christopher Mackenzie 23 August 2016 Financials for Office 365 www.o365financials.com
LANDED COST INTRODUCTION Landed Cost is the total expense of receiving goods at the place of retail sale, and includes retail purchase price, transportation costs, duties, value added taxes, excise tax and other taxes. This module interacts with the Distribution module, utilising the Landed Cost Receipt in place of a Warehouse receipt. The Landed Cost module aims to provide a simplified process with minimal steps; the ability to update planned receipt dates of underlying Purchase Orders from the Landed Cost Receipt document, and capture any degree of information of the shipment of goods to result in an invoice for the goods and for the shipment of these goods. CONTENTS 1. How to set up Landed Cost Page 3 Learn how to set up the Landed Cost Receipt process within Financials for Office 365, including the integrated modules such as inventory management, warehouse management, and accounts payable. 2. How to use Landed Cost Page 8 Run through the full process of purchasing goods from an overseas supplier and incorporate landed cost to calculate the real cost of the goods. 3. Contact Us Page 15 2
LANDED COST SET UP To incorporate landed costing into the standard edition of Financials for Office 365, the following areas require setup: Landed cost set up Warehouse employee set up Warehouse set up Inventory set up Inventory charge set up Note: The Landed Cost module is an extension of the Distribution module within Financials for Office 365 and requires at a minimum, a flash implementation of the Finance and Distribution White Papers. LANDED COST SET UP First, search Landed Cost Setup: Here, you can enter your preference of Landed Cost number series for both Landed Cost Receipts and posted Landed Cost Receipts. For example: 1. Click on the button of the Landed Cost numbers field and choose + new 2. As seen in the capture below, enter the preferred code for the Landed Cost number series. In this example, LCOST is used. 3
3. Click on the Starting No. field next to enter in the number fields: The starting date of the number series The starting number of the number series The ending number of the number series The warning number that specifies when you want to receive a warning that the number series is running out And finally, the figure this number is to be incremented by. Below is the recommended number series if you wish to use a generic number series in your system: Repeat the process for the posted Landed Cost Receipts with the addition to the selected code with a + (L-Cost+) Lastly, after entering both number series, return to the Landed Cost Setup and tick the checkbox for enabled. 4
WAREHOUSE EMPLOYEE SET UP To utilise the Landed Cost Receipt functionality, the Financials for Office 365 user needs to be set up as a Warehouse Employee. 1. Search for Warehouse Employees and click on the related link 2. Click on the New button in the ribbon 3. Enter the User ID 4. Choose the location where the user will be working 5. Select the Default checkbox to define the location as the only location where the employee can perform warehouse entries 6. Repeat these steps to assign other employees to locations for existing warehouse employees WAREHOUSE SET UP The location where the Landed Cost Receipts will take place requires Warehouse Set Up. This will create the requirement for a receipt to be made upon accepting inventory to a warehouse. 1. Search Locations and click on the related link 2. Open the relevant warehouse location by selecting Edit in the ribbon 3. Within the Warehouse FastTab, as a minimum, tick the Require Receive checkbox 5
INVENTORY SET UP Within the item card under the Warehouse FastTab, there are four fields that can directly correlate to the Landed Costing of the item: Duty code Duty due % Unit volume Net weight Note: Having these fields populated is not a prerequisite but if required, can act as the item charge units of measure when calculating the associated cost with importing the goods. 6
INVENTORY CHARGE SET UP For payment of shipment vendors, Financials for Office 365 utilises item charges to allocate the expense of shipment, thereby providing an accurate cost of goods sold. Examples of item charges are freight, insurance, and other additional charges directly related to a specific item. You can set up codes for the different types of item charges that you want to post and then determine to which accounts the program will post costs related to sales, purchases, and inventory adjustments. 1. Search Item Charges and click on the related link 2. From here, you can insert your own item charges and include the appropriate apportion methods. This includes the following 5 methods: The item charge can be used: To identify the Landed Cost of an item for making more accurate decisions on how to optimise the distribution network For breaking down the unit cost / unit price of an item for analysis purposes To include purchase allowances into the unit cost and sales allowances into the unit price 7
LANDED COST HOW TO USE To process the Landed Cost for a purchase transaction, Financials for Office 365 undertakes three steps: Creating a Purchase Order and releasing the PO for arrival Creating a Landed Cost Receipt to manage the delivery of a single or multiple PO s to the warehouse Creating a Purchase Invoice to the shipping vendor, thereby apportioning the cost of shipment to the cost of goods sold in the scenario CREATING A PURCHASE ORDER First, create the Purchase Order from an overseas vendor. This will represent the shipment of inventory from an overseas supplier thereby incurring Landed Cost on a purchase. 1. Search Purchase Order and click on the related link 2. Click New in the ribbon, next enter the buy from vendor (specifically an overseas vendor, such as 47586622 Monabekken Barnesenger A/S.) 3. In the Lines table, select item 7000 (an item with the warehouse duty section filled out) 4. Specify a location with the Must Receive checkbox ticked 5. Input a quantity of 10 6. Insert a vendor invoice number 7. Print the order and release the document 8
CREATING AND POSTING A LANDED COST RECEIPT Next is to create a Landed Cost Receipt to account for the delivery of the inventory. This can incorporate a single Purchase Order from a supplier or multiple Purchase Orders being sent to the one location/warehouse. 1. Search Landed Cost Receipt and click on the related link 2. Click New in the ribbon to generate a new receipt number 3. Select Blue in location code 9
4. Go to Actions tab and click on Get Source Documents 5. Highlight the first Purchase Order you created above and click OK 6. Enter any relevant information within the Shipment FastTab 7. Enter a test number within the Vendor Shipment number Users have the option of applying a Landed Cost Budget against the apportioned item charges, for example duty charge, freight costs etc. 8. Click on Navigate in the ribbon and then Landed Budget Cost 9. Enter a budget line for LC-FREIGHT item charge, with Apportion Method = Weight and Amount = 350.00 10. Click Update Overhead Rate on Purchase Order Lines 10
11. On the Landed Cost Receipt, click on Print within the Actions ribbon The last functionality available within the Landed Cost Receipt is to update the expected receipt dates. This will update the due dates on all Purchase Orders within that Landed Cost Receipt. This allows the user to batch update Purchase Orders in case the shipment is delayed or early. 12. Update the Expected Receipt Date to the end of the month. Click on Actions, then Update Expected Receipt Date on Purchase Order Lines 11
13. Post the Landed Cost Receipt. Click on the relevant link in the Actions ribbon 14. Go to the Purchase Order then click on Actions > Functions > Reopen CREATING A PURCHASE INVOICE TO THE SHIPPING VENDOR The creation of a Purchase Invoice for the shipping vendor is streamlined by the ability to produce the shipment lines from the Landed Cost Receipt. This maintains the relationship between the inventory shipment and the item apportionment. 1. Search for Purchase Invoice and click on the related link 2. Click New in the ribbon 3. Hit Enter to generate a new number 4. Select 01863656 in Buy from Vendor No. 5. On the Lines section, enter the following information: a. Type = Charge (Item) b. No. = LC-CARTAGE 12
c. Enter TEST in Vendor Shipment No. (drilling down on this field displays the Posted Lan. Cost Receipt List) d. Quantity = 1 e. Direct Unit Cost = 350 6. Click on the Functions button on the Lines Tab, then Calculate Landed Cost Apportionment. This will result in the apportionment assignment to be successfully completed. 7. Review apportionment of each line by clicking on Line in the ribbon and selecting Item Charge Assignment 8. Include a Vendor Invoice Number 9. Post the Invoice 13
Congratulations! You now know how to set up and use the Landed Cost functionality. Please do not hesitate to contact us should you have any questions. 14
LANDED COST CONTACT US Support: Support@o365financials.com www.o365financials.com/learn/support Sales: Sales@o365financials.com Financials for Office 365 50 Bridge Street Sydney NSW 2000 www.o365financials.com 15