What is the Landed Cost?
Landed cost is the total cost of a product, accumulating all expenses required to receive the product from the supplier during the procurement process. It includes the actual purchase price of the goods and all shipment charges, freight charges, duty fees, taxes, insurance and all the other costs incurred along the way.
In today’s competitive conditions, calculating the landed cost accurately is crucial for companies, more than ever. Proper calculation of product costs enables determining the sales price as precise as possible, whilst still guaranteeing profitability.
How to manage Landed Cost in Netsuite?
NetSuite’s Landed Cost Management module seamlessly integrates with Purchase Orders, Inbound Shipments and Vendor Bills, facilitating the inclusion and allocation of supplementary expenses like shipping, insurance, and customs duties. It incorporates diverse allocation methods such as by weight, quantity, value, or even customizable approaches, on global transaction or line item level, ensuring precise and efficient cost assignment. The system automatically computes the total asset cost for received items, while robust reporting tools offer comprehensive insights into landed costs in real time. This empowers informed decision-making for procurement and logistics, ensuring financial accuracy, compliance, and optimized inventory management within the NetSuite platform.
Novutech Landed Cost Solution
Out-of-the-box, Netsuite provides 3 cost allocation methods: weight, quantity and value. However, for some companies who source very diverse items from multiple suppliers in (mostly) overseas countries, the requirements for proper tracking of landed cost are more demanding. One example would be the import of lightweight, high volume items in sea containers, which requires the purchaser to allocate the shipping costs to the different items based on the volume they take up in each container. Based on our experience working for customers with such diverse supply chains, Novutech brings you a comprehensive solution to have more flexibility on landed cost, featuring volume based and even customized allocation methods. Besides, our solution also caters for the recording of additional costs for Inbound shipments after receiving and the subsequent recalculation of the item costs for historic receipts.
Key Features
- Volume Based Landed Cost
- Landed Cost over duty Percentages
- Based on inbound shipments
- Flexibility to add expenses after receipt
- Recalculation for open periods
- Multicurrency
Customized allocation methods
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Novutech Landed cost solution allows users to enter volume and duty information on the item level.
Intuitive and time saving entry form for landed costs, with visibility of inbound shipments
Custom Landed Cost Process
The custom process developed by Novutech includes the following steps:
- Landed cost transactions are created by users and applied onto an inbound shipment, after bills and manually entered transactions are completed
- Users can process all the charges over receipts which are related with the specific inbound shipment.
- During the allocation process, the Netsuite landed cost lines will be updated with the data sourced from Novutech’s landed cost form.
- This allocation process can be re-run for open periods.
