What's New With QuickBooks 2020 - Landed Cost
With the beginning of a new year, Intuit has released new versions of QuickBooks Desktop 2020 Pro, Premier, Accountant, Enterprise and Mac. These updated versions are complete with new and improved features to help you run your business. The tools are to empower you and help you work more efficiently.
Landed Cost is available in QuickBooks Desktop Enterprise 2020 with a Platinum Subscription and Advanced Inventory enabled.
How To Access It
From the menu bar, select
Edit -> Preferences -> Items & Inventory -> Company Preferences -> Advanced Inventory Settings -> Landed Cost tab -> Setup Landed Cost Account.
NOTE: The Landed Cost setup requires that you create an Other Current Asset type account and map to this account any Other Charge item types that have or will be used for freight, duties and other related landed costs. The type of account to be used may change with future releases of QuickBooks.
Feature Benefits: The cost of obtaining inventory stock includes more than just the material costs of the items. With the new Landed Cost feature, QuickBooks Enterprise users will have greater visibility into actual product costs by factoring in freight, duties, insurance and other miscellaneous landed costs. Calculated by quantity, value, weight or volume.
Landed Cost Work-Flow Summary
- Set up Landed Costs in Advanced Inventory preferences. This preference setup creates an Other Current Asset account, or the user can select an existing Other Current Asset account for accruing unallocated landed costs.
- In the setup, select all Other Charge item types currently used to record freight, duties, import fees or other landed cost items. If none exist, the user can create them during the preference setup. During the preference setup, the assigned expense account is changed or defaulted to the newly-created Other Current Asset account.
- Bills are entered for freight, duties, import fees and other product costs using the Other Charge items on the Items tab of expense transactions. The accounting result is to increase (debit) the Other Current asset account balance created during the setup and increase (credit) the Accounts Payable account balance for the freight, duties or other related costs vendor.
- To allocate the accrued Landed Costs (credit the Other Current Asset account and debit Inventory Asset or Cost of Goods Sold) select a bill with inventory purchases recorded on the Items tab. Select the Calculate Landed Cost button on the top right. The Calculate Landed Cost window displays.
- Enterprise users select which freight bills to allocate to the product costs and how to calculate the allocation: Quantity, Percentage, Amount or S&H Cost (manual).
- Landed Costs will then offer the user the option to update the Selling Price for selected inventory item(s). The New Selling Price is manually entered and, if Update & proceed is selected, will update the default Sales Price in the Item record.
- Whether or not the user updates the new selling price, Enterprise will increase the average cost of the product. The Inventory Asset account will be increased (debited) in the case where the inventory is not sold out, or the Cost of Goods Sold account(s) will be increased (debited) in the case where the inventory is already sold out. All this will take place while not affecting the original amount being paid to supplying vendor.
- Enterprise maintains the original vendor bill amount by decreasing (crediting) the Other Current Asset account assigned in the Landed Cost preference setup for the amount of the allocated landed costs.