Additional costs allows you to incorporate costs associated with the procurement of items into your Purchase orders (PO). These costs come in handy if you're importing items from abroad or if shipping related costs make up a considerable amount of the final costs of goods. These additional costs are distinct from regular inventory items — their value can be allocated across purchased items, thus impacting the overall inventory value of those items.
You can select from three distinct cost categories: Shipping, Customs, and Other. Multiple rows of additional costs can be included within a single PO. These extra expenses are factored into the calculation of the order's total, and are also displayed on PDF printouts of the order.
You can apply additional costs to both Not received and Received POs as long as they fall within an open inventory period. These costs can be added to both Purchase orders and Outsourced purchase orders.
Note: It's currently not possible to Partially receive a PO that has Additional costs or add Additional costs to an order that is already Partially received.
Adding Additional costs to a PO
Open the PO you want to add Additional costs to.
Click on Additional costs under the Items table.
An Additional costs table will be added.
Choose a cost category by clicking on the Cost field and picking from the dropdown.
Choose whether or not you'd like to distribute the cost between purchase items by clicking on the Distribution method field and choosing from the dropdown.
Click the Total price field to adjust the amount. The price here is based on the currency of the order.
Choose which tax rate to apply by clicking on the Tax field and choosing from the dropdown.
NB! Tax is not distributed between the purchased items.
You can add another cost row by clicking on + Add row below the Additional costs table.
Additional costs are included in the order totals.
You can then email a PDF with the Additional cost rows directly to the supplier or print it out.
Find the total unit cost with the distributed additional costs in the Item table's Landed cost column. As a calculated field, this cannot be edited. Values are in stock UoM and order currency.
If additional costs are added or changed on a Received PO, the Moving average cost (MAC) for the items on the order are recalculated.
By value distribution method
By value distribution method allocates the largest proportion of the additional costs to the most expensive item.
For example you have three items on a PO.
Item A: 4 pcs, 8 USD/pcs, Total price $32 USD
Item B: 4 pcs, 10 USD/pcs, Total price $40 USD
Item C: 4 pcs, 12 USD/pcs, Total price $48 USD
Total price for three items 32 + 40 + 48 = $120 USD
Additional costs to distribute is in total $105 USD
Per every USD payed as a purchase price, there will be additional 105 / 120 = 0.875 USD of additional costs, i.e.
Item A: Landed cost 8 + 8 * 0.875 = 15 USD/pcs
Item B: Landed cost 10 + 10 * 0.875 = 18.75 USD/pcs
Item C: Landed cost 12 + 12 * 0.875 = 22.5 USD/pcs
Note: If all the items on the order have a price per unit equaling zero, the costs are distributed by quantity.