Landed Cost Calculation

Received awaiting bill

Foreign currency purchase orders are subject to landed costs. These costs may not be known at the time the goods are received.

Instead of putting them directly into inventory on hand, these are received with an awaiting bill status and transferred into a virtual inwards area on Qblue Inventory. The benefit of this is that the accurate landed costs of each product are calculated, resulting in the correct cost of goods sold for each sales order.

Purchase orders received awaiting bill

Calculating landed costs

Qblue Inventory calculates landed costs using a simple formula:

Product price + shipping (or freight) costs + customs and excise fees + insurance + devanning + all other fees = landed cost

The cost type can be edited and customized.

There are three methods for calculating the pro-rata costs of product items:

  • By value, as a percentage of total base currency value (all currency amounts will have exchange rates for the conversion)
  • Product weight as a percentage of total weight
  • Product volume as a percentage of total weight