Actual landed costs

Actual landed costs are the known amounts of the extra acquisition expenses that you receive after the purchase of inventory items, such as for freight or insurance. When you enter actual landed costs (and match them to estimated landed costs, if applicable), your inventory valuation is updated to reflect the full cost of buying the items.

Subscription Purchasing
User type Business, Warehouse
Permissions Purchasing transactions: List, View, Add, Edit, Delete
Configuration The landed cost workflow is set up.

About actual landed costs

When you create a transaction to enter actual landed costs, you enter a line item for each landed cost. At the line level, you select the original purchase transaction or inventory control transaction with the inventory items to link the landed cost to.

If your organization is using estimated landed costs, you can also match an actual cost to its estimate, if one exists. In addition to adding the actual cost to the item valuation for the original purchase, Sage Intacct removes the amount of the estimate from the valuation. Thus, any difference between an actual cost and its estimate is reflected in the updated valuation.

Entering actual landed costs needs the following setup in the Configure Inventory Control page:

  • Landed costs is enabled for Actual costs only or Estimates and actuals.
  • The transaction definition for the transactions to enter actual landed costs is enabled for entering actual landed costs. Usually, a vendor invoice is used.

    In addition, each landed cost you enter needs to be set up as a non-inventory item enabled for landed costs.

See your Sage Intacct administrator for information on which purchase transactions and non-inventory items to use to enter actual landed costs.

Transactions in which you enter actual landed cost include extra fields. The extra fields that you see in the Details area of each line item depend on whether your organization is enabled for Actual costs only or Estimates and actuals.

Actual costs only Estimates and actuals

Distribute landed cost to item in transaction

Distribute landed cost to item in transaction

When you select the transaction to link the actual cost to, the Match Actual Landed Cost to Estimate dialog box opens. The dialog box displays the estimated landed costs that were entered in the original purchase transaction, if any.

Landed cost category View distribution detail button

Enter an actual landed cost

When you create a transaction to enter an actual landed cost, how you enter and link the actual cost to the original purchase transaction (or inventory control transaction) differs slightly, depending on whether your organization is enabled for Actual costs only or Estimates and actuals.

Select one of the following links to jump to the appropriate set of directions in this topic:

See examples at the end of each set of directions.

Enter an actual cost: Actual costs only enabled

When you enter an actual landed cost and your organization is enabled for Actual costs only, you select the original purchase transaction to link the actual cost to and specify how the amount of the cost is to be proportionately distributed to the inventory items in the original transaction.

To add an actual landed cost:

  1. Go to Purchasing > All > Transactions, and select Add (circle) next to the applicable purchase transaction for entering actual landed costs.
  2. In the transaction header, enter the information. Make sure to select a Vendor.

  3. In the Entries section, add a line item for each actual landed cost. For each line item, do the following:

    1. Enter 1 in Quantity.

    2. Enter the amount of the actual landed cost in Price.

      Sage Intacct uses the amount in the Extended price field. So, the values you enter for Quantity and Price do not really matter as long as the Extended price field reflects the amount of the actual landed cost.
    3. Select Show details to expand the details area.

    4. Use the Distribute landed cost to items in transaction dropdown list to select the original purchase transaction (or inventory control transaction) with the inventory items to distribute the actual landed cost to.

      You can select View to see the items in the original transaction.
      Only purchase and inventory control transactions that have a value-increase inventory effect (ONHAND Value or Quantity & Value) appear in this dropdown list.

    5. Use the dropdown list to select the Landed cost category.

      Sage Intacct uses the distribution method associated with the Landed cost category to proportionately distribute the actual landed cost to the inventory items in the original purchase or inventory control transaction. If the name of the Landed cost category doesn't identify its associated distribution method, select a category in the list and select View.

      The types of items that your organization purchases and the types of landed costs you are distributing to inventory items in original purchases or inventory control transactions can help you decide which distribution method to select to achieve a realistic distribution of the actual landed costs:

      • Value. The cost is distributed in proportion to the purchase price (Extended price) for the inventory items. You might choose Value for landed costs such as duties, which are typically charged on the total value of shipped items.
      • Count. The cost is distributed in proportion to the number of units that were purchased.
      • Volume. The cost is distributed in proportion to the volume that's recorded for each item. You might choose Volume if items differ in size and some take up much more space in a shipping container. Larger items are more likely to cost more to deliver.
      • Weight. The cost is distributed in proportion to the weight that's recorded for each item. You might choose Weight for landed costs that are based on weight, such as freight. Heavier items, like sacks of gravel versus sacks of moss, are more likely to cost more to deliver.

      For more information and examples of the calculations to distribute landed costs, see Landed cost distribution methods.

  4. When you have completed entering all the line item information, select Post.

    For each actual cost you entered, Sage Intacct automatically creates a SYS-LC Actuals Adj Incr transaction, which increases the value of the inventory items in the original purchase or inventory transaction based on the distribution method you selected. You can check the SYS-LC Actuals Adj Incr transactions to see how each actual landed cost was distributed.

    Sage Intacct distributes a landed cost to the inventory items that are enabled for landed costs and set up for the distribution method associated with the landed cost category you selected. By default, all inventory items enabled for landed costs are automatically set up for distribution by Value. Items need to be set up for distribution by Count, Volume, or Weight.

    For an example of how the inventory subledger and GL are affected, see how actual landed costs only works.

After you've linked an actual cost to an original source transaction, the source transaction can no longer be edited or deleted.

Examples of entering actual costs: Actual costs only enabled

You can enter one or more actual landed costs in a transaction. The following scenarios show some examples of entering actual costs and the flexibility that using different distribution methods provides.

Inventory items were purchased in the same transaction. Later, Pacific Freighters bills you for $100 in freight charges and $150 in insurance fees. To distribute the actual landed costs to the inventory items in the original purchase, you would create one transaction and do the following:

  1. Select Pacific Freighters as the vendor.
  2. Enter a line item for the $100 in freight charges, select the original purchase transaction, and select an appropriate landed cost category (perhaps one that's associated with distribution by weight makes sense in this case).
  3. Enter a second line item for the $150 in insurance fees, select the original purchase transaction, and select an appropriate landed cost category (perhaps one that's associated with distribution by value makes sense in this case).

A purchase transaction was entered for buying sacks of soil and moss at the beginning of the month. Three days later another purchase transaction was entered for buying sacks of fertilizer. Later, Pacific Freighters bills you for $200 in freight charges for both purchases.

To distribute the landed cost for freight to the purchases, you'd first decide how much of the $200 to apply to each purchase. Say $150 for the soil and moss purchase and $50 for the fertilizer purchase. Then you'd create one transaction and do the following:

  1. Select Pacific Freighters as the vendor.
  2. Enter a line item for $150 in freight, select the purchase transaction for the soil and moss, and then select an appropriate landed cost category.
  3. Enter a second line item for $50 in freight, select the purchase transaction for the fertilizer, and then select an appropriate landed cost category.

Enter an actual cost: Estimates and actuals enabled

When your organization is enabled for Estimates and actuals, after you enter an actual landed cost and select the original purchase transaction (or inventory transaction) to link the actual cost to, the Match Actual Landed Cost to Estimate dialog appears. You use the dialog to match the actual to an estimate, if one exists. You also use the dialog even if you do not match the actual cost to an estimate.

You do not have to match an actual landed cost to an estimate.
  • The purchase of the inventory items didn't include any estimates. Entering estimated landed costs on the purchase of items is not required.
  • The purchase of the inventory items included estimates, but not for all the actual landed costs that were later received. For example, when the items were purchased, a landed cost for insurance was not expected. Yet, a vendor invoice was later received for insurance.
  • The actual landed cost might only be partial. You anticipate being billed for the remaining portion later and want to wait to match the remainder of the actual landed cost to the estimate. For example, you estimated $1,000 in freight. The first billing for actual freight charges was $200. You expect the second billing for the remaining freight charges to be larger than the first billing.
  • Another actual cost has already been matched to the estimate.
  • You linked the actual cost to an inventory control transaction. Entering estimates on inventory control transactions, like a transfer in, is supported.

To add an actual landed cost:

  1. Go to Purchasing > All > Transactions, and select Add (circle) next to the applicable purchase transaction for entering actual landed costs.
  2. In the transaction header, enter the information. Make sure to select a Vendor.

  3. In the Entries section, add a line item for each actual landed cost. For each line item, do the following:

    1. Enter 1 in Quantity.

    2. Enter the amount of the actual landed cost in Price.

      Sage Intacct uses the amount in the Extended price field. So, the values you enter for Quantity and Price do not really matter as long as the Extended price field reflects the amount of the actual landed cost.
    3. Select Show details to expand the details area.

    4. Use the Distribute landed cost to items in transaction dropdown list to select the original purchase transaction (or inventory control transaction) with the inventory items to distribute the actual landed cost to.

      You can select View to see the items in the original transaction.
      Only purchase and inventory control transactions that have a value-increase inventory effect (ONHAND Value or Quantity & Value) appear in this dropdown list.

      The Match Actual Landed Cost to Estimate dialog appears. The dialog displays the estimated landed costs that were entered in the original purchase transaction, if any.

    5. Do one of the following in the Match Actual Landed Cost to Estimate dialog, and then select Done:

      • To match the actual cost to an estimate, select the Link to an estimate to reverse it radio button. Then, select the estimate you want to match the actual to. Matching causes the amount of the estimate to be removed from the value of inventory items in the purchase.

        • The Estimates section is empty if no estimates were entered in the original purchase transaction.
        • You cannot match the actual to any estimate that already has another actual cost matched to it.
        • Sage Intacct distributes the actual cost to the inventory items in the original purchase transaction based on the distribution method that's associated with the Category that was used to distribute the estimated cost.

      • If no estimates exist or you do not want to match the actual to an estimate, select the No estimate; distribute costs across goods on vendor invoice radio button. Then, select the Landed cost category with the distribution method you want Sage Intacct to use to proportionately distribute the actual cost to the inventory items in the original purchase transaction.

        For more information on the distribution of costs and considerations for selecting which method, see Landed cost distribution methods.

        Sage Intacct distributes the landed cost to the inventory items that are enabled for landed costs and set up for the distribution method associated with the landed cost category you selected. By default, all inventory items enabled for landed costs are automatically set up for distribution by Value. Items need to be set up for distribution by Count, Volume, or Weight.

      Before you select Done, check how the actual landed cost will be distributed to the inventory items in the original source transaction. Just look at the Entries in the original source transaction table in the dialog. And, if necessary, make any changes to get the distribution you want.

      6. To re-display the Match Actual Landed Cost to Estimate dialog, select the View distribution detail button.
  4. When you have completed entering all the line item information, select Post.

    • For each actual cost that was matched to an estimate, Sage Intacct automatically creates two underlying inventory control adjustments transactions:

      • SYS-LC Actuals Adj Incr: adds the actual cost to the value of the items in the original purchase
      • SYS-LC Estimates Rev Adj Decr: removes the estimated cost from the value of the items in the original purchase
    • For each actual cost that was not matched to an estimate, Sage Intacct automatically creates a SYS-LC Actuals Adj Incr transaction, which adds the actual cost to the value of the items in the original purchase.

    For an example of how the inventory subledger and GL are affected, see How estimated and actual landed costs works.

After you've linked an actual cost to an original source transaction, the source transaction can no longer be edited or deleted.

Examples of entering landed costs: Estimates and actuals enabled

You can enter one or more actual landed costs in a transaction.

When you purchased inventory items on June 1, you entered an estimated cost of $1,000 in freight and $400 in insurance on the purchase transaction. A month later, Pacific Freighters bills you for $1,100 in freight and $300 in packing fees for the purchase. The final freight cost was slightly more than you estimated, and you didn't expect to be billed for any packing fees.

  1. Select Pacific Freighters as the vendor.

  2. Enter a line item for $1,100 of freight and select the original purchase transaction. In the Match Actual Landed Cost to Estimate dialog:

    1. Select Link to an estimate to reverse it.
    2. Select to reverse the estimate for $1,000 in freight.
    3. Select Done.

  3. Enter a second line item for $300 of packing and select the original purchase transaction. In the Match Actual Landed Cost to Estimate dialog:

    1. Select No estimate; distribute costs across goods on vendor invoice.
    2. Select an appropriate Landed cost category (perhaps one that's associated with distribution by weight makes sense in this case).
    3. Select Done.

  4. Select Post.

In this example, the estimated cost for insurance remains unmatched. You've yet to receive a vendor invoice with the actual known cost for the insurance expense.

When you purchased sacks of soil and moss on June 1, you entered an estimated cost of $200 in freight. When you purchased sacks of fertilizer on June 5, you entered an estimated cost of $100 in freight. A month later, Pacific Freighters bills you for $270 in freight charges for both purchases.

To match the actual landed costs to the estimates, you'd first decide how much of the $270 to apply to each purchase. Say $180 for the soil and moss purchase and $90 for the fertilizer purchase. Then you'd create one transaction and do the following:

  1. Select Pacific Freighters as the vendor.

  2. Enter a line item for $180 in freight and select the purchase transaction for the sacks of soil and moss. In the Match Actual Landed Cost to Estimate dialog:

    1. Select Link to an estimate to reverse it.
    2. Select to reverse the estimate for $200 in freight.
    3. Select Done.

  3. Enter a second line item for $90 in packing and select the purchase transaction for the sacks of fertilizer. In the Match Actual Landed Cost to Estimate dialog:

    1. Select Link to an estimate to reverse it.
    2. Select to reverse the estimate for $100 in freight.
    3. Select Done.

  4. Select Post.

Check the distribution of an actual landed cost

After you've entered one or more actual costs and post the transaction, the system links the transaction with the SYS-LC Actuals Adj Incr transactions that were created and the original source transaction. An easy way to see how the actual costs were distributed is to view the inventory adjustment increase transactions that the system created. The links to these transactions are in the History tab.

To see how an actual landed cost was distributed:

  1. If the transaction list with transaction you used to enter the actual landed cost is not already open, go to Purchasing > All and select the applicable transaction type to display the transaction list.
  2. Find the transaction in which you entered the actual landed cost, and select View.
  3. Select the History tab.
  4. In the Landed cost details section, select the desired SYS-LC Actuals Adj Incr inventory transaction.
  5. In the dialog where the adjustment increase transaction appears, review the cost distribution information in the Entries section.

You can also create a custom report using the Landed Cost History object to find related landed cost, inventory adjustment, and source transactions. See Create a landed costs report for more information.

Troubleshoot entering actual costs

The following table describes potential error conditions and provides possible solutions to enable you to accomplish your goal.

Problem Possible solution
The Distribute landed cost to items in transaction field is missing

The purchasing transaction definition for the transaction is not specified for entering actual landed costs in the Configure Inventory Control page. If you do not have appropriate permissions or authority to change the configuration, contact your Sage Intacct administrator.

Learn about configuring inventory control for landed costs.

An item for entering a landed cost is missing

A non-inventory item with an item type of Non-Inventory or Non-Inventory (Purchase only) needs to be created. If you do not have appropriate permissions or authority to create items, contact your Sage Intacct administrator.

Learn about creating non-inventory items for landed costs.
The transaction was created, but a SYS-LC Actuals Adj Incr transaction is missing from the History tab

Open the Details for the line item for the actual landed cost and ensure that a transaction was selected in the Distribute landed cost to items in transaction dropdown list.

A landed cost was not distributed to certain inventory items

This can be caused by several conditions:

  • The inventory item is not enabled for landed costs.
  • The inventory item is enabled for landed costs but is not Active for the distribution method selected in the header. (Items only have to be set up for Count, Weight, and Volume.)
  • Landed costs are only applied to inventory items with an Average, FIFO, or LIFO cost method.

If you do not have appropriate permissions or authority to change inventory items, contact your Sage Intacct administrator.

Learn about enabling inventory items for the distribution of landed costs.

A landed cost was not distributed to the inventory items in the manner expected

The can be caused by several conditions:

  • The Value in the setup of the inventory items for landed costs might be inaccurate. For each inventory item, verify the Value for each distribution method in the Advanced tab. If the UOM of the item in the General tab is the same as the distribution method in the table in the Advanced tab, the Value should be 1 (or blank). If the UOM of the item differs from any of the distribution methods in the table, the Value should be a multiplier that represents the item in the base unit of the distribution method.

    If you do not have appropriate permissions or authority to change inventory items, contact your Sage Intacct administrator.

  • Review the information about landed cost distribution methods and calculations.

Edit an actual cost

An actual cost can be edited if the actual cost or any other actual cost in the same transaction are not linked to a source transaction that's now in a closed period. For more information, see the rules about editing purchasing transactions.

To edit an actual landed cost:

  1. Open the applicable purchase transaction list, find the transaction with the actual cost, and select Edit.
  2. Edit the actual cost, and select Post.

When you post the transaction, the system deletes the existing SYS-LC Actuals Adj Incr transactions and automatically generates new SYS-LC Actuals Adj Incr transactions for each actual landed cost. Thus, the inventory valuation for the purchase is updated accordingly.

If your organization is enabled for estimated landed costs and any actual costs were matched to estimates, the system also deletes the existing SYS-LC Estimates Rev Adj Decr transactions and automatically generates new SYS-LC Estimates Rev Adj Decr transactions for the matched landed costs.

Delete an actual cost

An actual cost can be deleted if the actual cost and any other actual costs in the same transaction are not linked to a source transaction that's now in a closed period. For more information, see the rules about deleting purchasing transactions.

To delete an actual landed cost:

  1. Open the applicable purchase transaction list, find the transaction with the actual cost, and select Edit.
  2. Delete the line item for the actual cost. Then, select Post.

The amount of the actual cost is removed from the item valuation in the original purchase.

Create a landed costs report

If your company is subscribed to Customization Services or Platform Services, you can use two report objects to create reports about your landed costs transactions.

In the custom report writer, for the primary data source in Step 1, select either:

  • The Landed Cost History object, or
  • The Inventory Control Transaction Detail object, selecting the SYS-LC Actuals Adj Incr transaction as the starting point

Then, select the desired columns, select the column sequence, and so on.

Learn how to create custom reports.

Update inventory costing after adding landed costs

When you add landed costs and some or all the purchased items have been sold, the COGS for the sale of the items need to be updated. For more information, see how to maintain comprehensive COGS.

Field descriptions

The following table describes each item in the Match actual landed cost to estimate dialog.

Match actual landed cost to estimate dialog field descriptions
Field Description

Date

The date the transaction was created.

Entry line number

The number of the line item in this transaction with the actual landed cost.

Item ID

The ID of the item for the actual landed cost.

There are estimated landed costs
  • Link to an estimate to reverse it. Displays the Estimates section, where you can select which estimate to match the actual cost to. Linking an actual to an estimate removes the estimated amount from and adds the actual amount to the value of the items in the original purchase. The actual amount is proportionately distributed across the inventory items in the original purchase with the same distribution method that was used to distribute the estimated amount.
  • No estimate; distribute costs across good on invoice. Adds the actual amount to the value of the items in the purchase without removing any estimated amount. The actual amount is proportionately distributed across the inventory items in the original purchase using the distribution method associated with the selected Landed cost category.

Landed cost category

This field only appears when the No estimate; distribute costs across good on invoice radio button is selected.

Select the landed cost category with the distribution method that you want the system to use to distribute the actual landed cost across the applicable inventory items in the original purchase.

Estimates section

This section only appears when Link to an estimate to reverse it is selected.

Estimates section field descriptions
Field Description

Select to reverse

Select the checkbox to match the actual landed cost to the estimate in the line.

State

Indicates whether an actual cost in this transaction or another transaction is matched to the estimate:

  • Matched by. An actual cost in another transaction is matched to the estimate.
  • Selected by. An actual cost in this transaction is matched to the estimate.

Document no.

The identifier of the transaction with the actual cost that's matched to the estimate.

Line no.

When an actual cost in this transaction is matched to the estimate, the line number of the actual cost in the transaction.

Category

The landed cost category selected when the estimate was entered on the original purchase. The system uses the distribution method associated with the landed cost category for the estimate to proportionately distribute the actual cost to the inventory items in the original purchase.

Estimated amount

The amount of the estimate entered on the original purchase transaction.

Description

The description of the estimate entered on the original purchase transaction.

Entries from the source transaction

Entries from the source transaction field descriptions
Field Description

Item

Item in the original source transaction.

Eligible for distribution

Included indicates that the landed cost will be distributed to the item.

A landed cost can only be distributed to inventory items in the original source transaction that are enabled for landed costs and are set up for the distribution method associated with the landed cost category that's selected.

Extended cost

The Extended price of the item in the original source transaction (Quantity x Price).

Percent of distribution

The percentage of the landed cost distributed to the item.

Landed cost amount

The amount of the landed cost distributed to the item.