Landed Cost Flow

Table of Contents
Introduction .................................................................................................................................................. 2
Flow Steps..................................................................................................................................................... 2
Create PO .................................................................................................................................................. 2
Interface this PO to landed cost module .................................................................................................. 3
Review Purchase Orders for Landed Cost ................................................................................................ 3
Create Trade Operation ........................................................................................................................... 4
Add Charge to Trade Operation ............................................................................................................... 5
Allocate Estimated Charges on Material PO ............................................................................................. 7
Receiving for the Material PO .................................................................................................................. 9
Run interface job “Transfer Transactions from Receiving to Costing”.................................................... 11

Apply Landed Cost to Receipt ................................................................................................................ 12

Create\Review Receipt Accounting Distribution ................................................................................... 13
Run interface job “Transfer Transactions from Inventory to Costing” .................................................. 17
Create\ Review Cost Accounting Distribution ........................................................................................ 18
Create the AP Invoice for the landed cost Charge .................................................................................. 21
Run interface job: ‘Transfer Costs to Cost Management’ ....................................................................... 25
Run Landed Cost process: ‘Prepare invoice data’ ................................................................................... 26
Manage Charge Invoice Association ...................................................................................................... 26
Review Receipt Accounting Distribution After AP Invoice ...................................................................... 30
Review Cost Accounting Distribution After AP Invoice .......................................................................... 31
 Introduction
When Customer procure something and it arrives at customer’s destination, during that from the
supplier to the Inventory, it could accumulate charges while it is on the way.
Therefore, these charges could be Shipment, Duties, Carrier fees or Broker fees, etc...
Therefore, customer want to have the right evaluation and you want to capture all the additional
expenses. One other part is to help customers with the profitability analysis and choosing the right
supplier.
Once customer have that information captured in the system, they can do a lot of analysis and make
many Decisions, Sourcing, Pricing, or final costing or profitability analysis.
We will start the flow with creating a PO for the material
Qty = 50 at Unit Price = $2

Then from Landed Cost Process, you can interface this PO to landed cost module
Select the Process Name: Prepare material purchase order data, and submit.

From Review Purchase Orders for Landed Cost UI, find the material PO
Select Actions > Create Trade Operation > Create from Scratch

Give a Trade Operation Name, then Save and Close

Trade Operation by default will be in Draft Status, and system internally assign a sequence number.

Click the (+ ) icon to add landed cost charges

For simple Test Case, we will add only one charge “Freight”

For this “Freight” charge, you will need to provide Supplier Details , Charge Amount and Allocation Basis
(This tells how the charge amount will be allocated on each Unit of the material PO Qty).

Amount = $50, so landed cost expected to add up $1 as Freight to the PO Unit Price ($2 Material + $1
Freight)

In addition, user need to add a Charge Reference with a value, this will be used to link this Trade
Operation Charge to AP Invoice. Save and Close

Once you done, Click Action Menu at the Top of the Trade Operation and Select Update Status
Change Trade Operation status to Open

Again, from Action Menu, Select Allocate Charges

Click ‘Yes’ to confirm your option

System in process to Allocate charges

Once this completed, system will give you confirmation message that Charge Allocation Completed.

Now, you will see the allocated charge appear under Estimated Section
As, you can see Per Unit Allocation on the Qty = 50 from the Material PO= $1

User will do the Receiving for the Material PO

Search for the PO in Receive Expected Shipment UI

In our scenario, will receive the PO line entirely.

Click Submit and Now Receipt Created.

Run interface job “Transfer Transactions from Receiving to Costing”.

This will interface Material PO receipt to Costing Module

Also, run Landed cost Process “: Allocate landed cost charges” with apply to Receipt Option = Yes.

You can limit the process run to specifically the Trade Operation sequence number that generated at the
Trade operation creation

Save and Submit

Now, go to Receipt Accounting and Run Create Receipt Accounting Distribution process
Here, we need to run to the Same Bill to BU, where the Material PO was created.

Confirm the process succeeded

In Review Receipt Accounting Distribution UI, find for the Involved PO#

There are two Transaction created in Receipt Accounting

1. Receipt into Inspection : This indicate the Distribution lines of the Material PO
You will see the following Distributions at $ 2 Material PO price:

DR Receiving Inspection

CR Accrual
 2. Landed Cost Adjustment to Receipt

You will see the following Distributions at $1 for Freight from landed cost module:

DR Receiving Inspection

CR Landed Cost Clearing

To Review Distributions in Cost Accounting, we need to run the interface job:

‘Transfer Transactions from Inventory to Costing’.

This job will interface the inventory put way part of the receiving transactions to Cost Accounting
Module

Make sure it is Succeeded

Now Run Create Cost Accounting Distribution Process

Make sure it succeeded

From Review Cost Accounting Distribution UI, Click Advanced and Add ‘Field Reference Number’, then
Find for Reference Number = the PO #

You will see the two Cost Components

1. Material = the PO material price

2. Fright = the landed cost allocated estimated amount per unit
You will see the following Distributions for both cost components ($2 PO Unit Price + $ 1 Freight):

DR Inventory Valuation

CR Receiving Inspection
Now, we will create the AP Invoice for the landed cost Charge ‘Freight’

In the Invoice Header, give same Supplier information as entered in the Trade Operation

Enter other required fields and Amount

Click on Landed Cost Tab, Check the Enable flag and click (+) to add charge reference.

Enter same value as entered in the Trade Operation

Validate Invoice

Because of Tax setup, Header amount had to be change to meet the total amount after tax

Therefore, Validation succeeded.

Approve Invoice
Final Account and Post the Invoice

Make sure invoice is final accounted

Now, Run interface job: ‘Transfer Costs to Cost Management’

This job will interface the Invoice data to Costing Modules.

Enter same Bill to BU of the Material PO and Cutoff date on or after the Invoice date

Make sure the process Succeeded

.
Run Landed Cost process: ‘Prepare invoice data’

Got to ‘Manage Charge Invoice Association’ Task

Find the Invoice # created in AP

Click (+) icon on the bottom section to add the trade operation for association
Find the Trade operation in the search window, save and close.

Click ‘Confirm Association’

Now AP Invoice is successfully associated to the Trade operation

However, we still need to allocate the Actual AP invoice amount to the Material PO, similarly as we did
allocate the Estimation before.
After Click on Allocate Charges, now green arrow, appear in the Charge line Status

Allocated Actual Amount section will show the AP invoice amount.

Same Per Unit Amount appear because AP invoice line also have same amount as estimated.

However, the AP Invoice header hold more amount as non-Recoverable Tax.

This appear under Per unit Tax $0.09880

Run Create Receipt Accounting Distribution

Review Receipt Accounting Distribution:

One more transaction type created: ‘Landed Cost Adjustment for Receipt’

This because the extra amount in the AP invoice because of the added tax, this also appear as per unit
tax in the Actual section of the trade operation.

You will see the following Distributions for this Per unit Tax $ 0.0988 (Rounded up to $ 0.10):

DR Receiving Inspection

CR Landed Cost Clearing

Run Cost Accounting Distribution:

Review Cost Accounting Distribution:

Transaction Type: ‘Acquisition Cost Adjustment’ will be created for added tax amount from AP invoice

You will see the following Distributions for this:

DR Inventory Valuation

CR Receiving Inspection

END