How Odoo ERP Helps Manufacturing Companies Manages their Landed Cost
Landed costs include all charges associated with a good transfer.
Landed cost includes = Cost of product + Shipping + Customs + Risk
All of these components might not be applicable in every shipment, but relevant components must be considered as a part of the landed cost. We have to identify the landed cost to decide the sale price of the product because it will impact on company profits.
Here is how to automate this process on Odoo.
First, you need to activate the use of the landed costs. Go to Inventory application ‣ Configuration ‣ Setting. Check accounting option Include landed costs in product costing computation & Perpetual inventory valuation, then click on Apply to save changes. Then go to the Purchase application ‣ Configuration ‣ Setting. Choose the costing method Use a 'Fixed', 'Real' or 'Average' price costing method, then click on Apply to save changes.
Then go to the Purchase application ‣ Configuration ‣ Setting. Choose the costing method Use a 'Fixed', 'Real' or 'Average' price costing method, then click on Apply to save changes.
Landed Cost Types
Start by creating specific products to indicate your various Landed Costs, such as freight, insurance or custom duties. Go to Inventory ‣ Configuration ‣ Landed Cost types.
Link landed costs to a transfer, To calculate landed costs, go to Inventory ‣ Inventory Control ‣ Landed Costs. Click on the Create button and select the picking(s) you want to attribute landed costs.
Select the account journal in which to post the landed costs. We recommend you to create a specific journal for landed costs.
Therefore it will be easier to keep track your postings.
Click the Compute button to see how the landed costs will be split across the picking lines.
To confirm the landed costs attribution, click on the Validate button.
Singo Africa Ltd can help you set up this for you to ensure your whole importation costs for your raw materials, sub-assembly and semi-finished goods are all included to drive your company margin profits and align your business for best financial performance analysis.