Landed Cost Billing & Variance Management

Billing a Landed Cost Purchase Order / Variance Management

When Landed Cost Purchases Orders are billed, if any variances are identified, the application will use the Primary Landed Cost Variance Method (and if necessary the Secondary Landed Cost Variance Method) to determine how the variance should be handled. The options are as follows:

Update Inventory Cost (Open Period Only)	If the related Item Receipt is in an Open Period, it adjusts the landed cost on the Item Receipt to reflect the actual landed cost. This method ensures that the landed cost recorded on the Item Receipt matches the actual cost incurred, providing accurate cost tracking for inventory items. If the related Item Receipt is in a Closed Period, no further action is processed. When selecting this option. Selecting a Secondary Method is mandatory.
Update Inventory Cost (Open & Closed Period)	If the related Item Receipt is in an Open Period, it adjusts the landed cost on the Item Receipt to reflect the actual landed cost. This method ensures that the landed cost recorded on the Item Receipt matches the actual cost incurred, providing accurate cost tracking for inventory items. If the related Item Receipt is in a Closed Period, an inventory adjustment will be created to account for the variance.
Journal to COGS	Creates a journal entry to adjust the Cost of Goods Sold (COGS) account for the landed cost variance. This method directly impacts the income statement by recognizing the variance as an expense, ensuring accurate profit and loss reporting.
Journal to Variance	Creates a journal entry to a specific variance account to record the landed cost variance. This method segregates the variance from regular COGS and inventory adjustments, allowing for detailed tracking and analysis of landed cost discrepancies.
Do Nothing	No action is taken to address the landed cost variance. The variance remains unadjusted in the system, allowing users to manually review and handle discrepancies as they see fit.

Stand-Alone Bill Processing

Vendor Bills can be entered for Landed Costs without any Purchase Orders. If a Bill is entered that has an Item with a Landed Cost Category selected, a new button will appear on the Vendor BIll Allocate Landed Cost Bill

After selecting the button, a new page will appear where a user can allocate each Vendor Bill Line. The following fields are required to be populated:

• Calculation Method

• Allocation Method

• Primary Variance

• Secondary Variance

Item Receipts can then be filtered on the next page and selected by clicking the 'Add Line'

After selection, the system will automatically calculate the New Total Cost for the item.

Once Submitted, the system will create the appropriate Transaction Landed Cost and Transaction Landed Cost Allocation records, and either update the Item Receipt selected, or process the variance.

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