I have been reading this thread with great interest, and offer this as a possible way to implement “landed costs”.
This would have to happen on Purchase Orders so that stock gets the landed cost added. Purchase Orders are created as usual, but as landed costs (shipping, VAT, etc.) are incurred, the following mechanism connects them to the PO.
The Landed Costs for a PO are displayed in a popup window (similar to the the window that opens when clicking on an 'Order' link in the 'Customer Transactions' window). This window will have multiple lines to display each individual Landed Cost, 1 per line.
A “show Landed Costs” button will be added to the PO screen. This opens the Landed Costs popup window described above. An “Add Landed Cost Entry” button would be enabled. Landed Cost Entries would be special line items to enter landed costs information. There can be more than 1 “Landed Cost” entries, to address the needs specified by psonon:
“Yes, this is a concept foreign to those who have no use for it. It is far more a management tool than a "bookkeeping for tax purposes" general ledger entry. And there is far more than just shipping, there is VAT (I have businesses in China and the UK, as well as the US and VAT is a fact of life in the UK, as duty can be, also.) There are also costs such as drayage from port to warehouse and demurrage on the time the container is sitting on your property.
All of these need to calculated as costs of the particular item, not expenses down the COA, in order to tell what you are really making (and give a realistic markup / gross profit) per item. “
Landed Cost Entries would be recorded in a separate table. Each row in that table would have the following indexes:
* Landed Cost ID (a unique ID for the entry)
* PO ID (to connect the LC entry to the Purchase Order)
Each Landed Cost table row would also have the following user visible fields:
* Description (type: simple text)
* Amount (type: currency)
* Currency Type
* Date
* Type (dropdown, to select the type of allocation; quoting MaxPhotoBiker:
“However, in order to keep it very flexible, I would suggest FA offers three different options as how to calculate the cost proportion:
Based on:
a) item value (as you suggested)
b) item quantity
c) number of invoice lines (e. g.: 4 lines, then every line receives 1/4th of the landed cost)
d) weight (suggested by ctisystems)
e) manual (suggested by apmuthu)
* A “Linked Invoice” field to point to another invoice/PO, if that particular Landed Cost came from a separate invoice (there will need to be some back end code to make sure that a linked invoice doesn't end up being counted twice, once as “Cost of Goods Sold”, and once for the landed cost).
All line items on an invoice will have a Landed Costs button that opens the Landed Costs popup window. When the popup is opened from a Line Item, the Landed Costs entries will have a check box next to them. The user can check any and all Landed Cost entries that apply to that line item. When the popup window is closed (via a “Save” button), the system will link each selected Landed Cost entry with the Line Item.
This gives a (hopefully) easy to use interface to enter multiple landed costs data per invoice, and select which line items are included in each Landed Cost.
The Landed Costs calculation would work like this (remember, I'm not a programmer) Lets say there are 10 line items (1 - 10), and 3 Landed Cost entries (a, b, and c). The calculation gets the “Landed Cost amount” and the “Allocation Type” from landed cost entry (a), then it finds all of the line items from the invoice that have “landed cost line item (a)” enabled, and it allocates the landed cost for each line item. If “landed cost line item (a)” is allocated by number of lines, and 4 of the 10 regular line items have landed cost line item (a) enabled, then it allocates 25% of the “Landed Cost amount” to each line.
Then the calculation gets the “Landed Cost amount” and the “Allocation Type” from landed cost line item (b), then it finds all of the regular line items from the PO that have “landed cost line item (b)” enabled, and it allocates the landed cost for each line item. If “landed cost line item (b)” is allocated by weight, and 3 of the 10 regular line items have landed cost line item (b) enabled, then it sums the weight of the line items from the PO that have “landed cost line item (b)” enabled, and allocates “Landed Cost amount” to each line based on it's percentage of the total weight.
And so on...
The programmers can figure out the calculations for the various types of Landed Costs, where the calculations get stored, and how to link the various records.
Regards.
