The quick answer
Enter the charges on the item receipt's Landed Cost subtab. Pick a Cost Allocation Method (Weight, Quantity or Value), type each category's amount with Source Manual, and save. NetSuite splits every amount across the receipt lines whose items have Track Landed Cost checked. With Quantity, each line gets the charge times its received quantity divided by the total eligible received quantity. The receipt's GL Impact shows the split as one inventory debit and one credit to the category's expense account per item and category, and an average-cost item's value and average cost go up by its share.
The screenshots show sample data. Person and operating-company names are fictional. Use your own categories, accounts and items when you follow the steps.
Before you start
You need:
- Landed Cost turned on under Setup > Company > Enable Features > Items & Inventory. Typing the amounts on the receipt, as this guide does, doesn't need the Supply Chain Management SuiteApp. That add-on is for landed cost templates and estimated landed cost.
- A cost category for each kind of charge, with Cost Type Landed and an Expense Account. When landed cost is allocated, NetSuite credits that account. The freight or duty bill usually debits the same account, so most companies treat it as a clearing account and reconcile what's left: the difference between what was allocated and what was billed.
- Track Landed Cost checked on each item that should absorb the charges. A receipt line for an item without it gets nothing.
- Landed Cost per Line off on the receipt, so the charges are entered once for the whole receipt. If it defaults on in your account, clear it on the receipt.
- An open posting period for the receipt date, and a role that can receive inventory.
The example receives one purchase order from Tanaka Thermal Components into Reno Warehouse: 40 HX-40 Heat Exchangers at 310.00 and 120 FP-12 Filter Packs at 45.00, 17,800.00 in total. Freight is 2,400.00 and duty is 1,280.00. Both items use average costing and have no stock at Reno before the receipt, which keeps the new average cost easy to check. There's no tax, currency conversion or partial receipt. The account numbers are example data; yours will differ.
01. Check the landed cost setup
Go to Setup > Company > Enable Features, open the Items & Inventory subtab, and look for Landed Cost in the Inventory group. It's checked here.
Next, the categories. Go to Setup > Accounting > Accounting Lists and click View on Landed Cost - Freight. Cost Type is Landed and Expense Account is 6310 Freight Expense.
Use the List link to get back to the cost categories and view Landed Cost - Duties. It's also Landed, with Expense Account 6320 Duty Expense.
Then the items. Go to Lists > Accounting > Items and open HX-40 Heat Exchanger. On the Purchasing/Inventory subtab, Item/Cost Detail shows Track Landed Cost checked and Costing Method Average. Average Cost is still empty because nothing has been received yet. FP-12 Filter Pack is set up the same way.
02. Receive the purchase order
Go to Transactions > Purchases > Enter Purchase Orders > List and open PO1874. Its lines are the inputs for the split: 40 HX-40 at 310.00 for 12,400.00 and 120 FP-12 at 45.00 for 5,400.00.
Click Receive. On the receipt's Items & Expenses subtab, the Items list has both lines checked to receive, going into To Location Reno Warehouse at the order's quantities and rates. Landed Cost per Line is cleared. If you receive only part of an order, the split uses the quantities on this receipt, not the order.
03. Enter freight and duty
Open the Landed Cost subtab. Cost Allocation Method decides how each charge is shared across the eligible lines. Weight splits by item weight times quantity, Value by line amount and Quantity by units. Choose Quantity.
Type 2,400.00 in Landed Cost - Freight and 1,280.00 in Landed Cost - Duties. Leave both Source fields on Manual, because you're typing the amounts rather than pulling them from a bill. If the carrier or customs bill hasn't arrived yet, these are estimates, and you'll reconcile them against the bill later. Then click Save. The receipt is saved as IR1876.
04. Read the split in GL Impact
On the saved receipt, open GL Impact. The first three lines are the goods: 2150 Inventory Received Not Billed is credited 17,800.00, and 1250 Inventory is debited 12,400.00 for HX-40 and 5,400.00 for FP-12.
The rest are landed cost, in pairs: an inventory debit and a credit to the category's expense account, one pair per item and category. The Memo names the category and item. How lines are grouped and what the memo says can vary by account, so read yours by account and amount. HX-40 is 40 of the 160 units received, so it takes a quarter of each charge:
- Freight: 600.00 to HX-40 and 1,800.00 to FP-12, credited to 6310 Freight Expense.
- Duty: 320.00 to HX-40 and 960.00 to FP-12, credited to 6320 Duty Expense.
Inventory is debited 21,480.00 in all: 17,800.00 of goods plus the 3,680.00 of freight and duty.
05. Check the item's new cost
Go back to the receipt's Items & Expenses subtab and open HX-40 Heat Exchanger. Item/Cost Detail shows Total Value 13,320.00, which is 12,400.00 of goods plus 600.00 of freight and 320.00 of duty. Average Cost is 333.00, or 13,320.00 divided by 40. Last Purchase Price stays at the vendor's 310.00, unless Include Landed Cost in Last Purchase Price is checked under Setup > Accounting > Accounting Preferences > Items & Inventory.
Scroll to the Locations list. Reno Warehouse shows Quantity On Hand 40 and Value 13,320.00.
Check the result
- IR1876's GL Impact has a freight pair of 600.00 and 1,800.00 and a duty pair of 320.00 and 960.00, one per item.
- The freight credits go to 6310 Freight Expense and the duty credits to 6320 Duty Expense.
- HX-40 shows Total Value 13,320.00 and Average Cost 333.00, with Last Purchase Price still 310.00.
- Reno Warehouse shows Quantity On Hand 40 and Value 13,320.00 for HX-40.
Common questions
Which cost allocation method should I choose?
Pick the one that matches how the charge was actually incurred. Quantity spreads it by units received, Weight by item weight times quantity, which suits freight priced by weight, and Value by line amount, which suits charges like insurance that track value. A receipt uses one method for all its categories.
How does Quantity allocation work out each item's share?
Each eligible line gets the charge times its received quantity divided by the total eligible quantity. Here that's 40 of 160 units for HX-40, so 2,400.00 of freight gives it 600.00 and FP-12 gets 1,800.00. Duty of 1,280.00 splits 320.00 and 960.00 the same way.
Why did one of my items get no landed cost?
Only lines whose items have Track Landed Cost checked share in the allocation. Check that box on the item, and check that the line was received on this receipt. If Landed Cost per Line is on, the charges are entered per line instead of on the receipt's Landed Cost subtab.
What account does a landed cost category credit?
The Expense Account on the cost category. Allocation debits inventory and credits that account. It's usually a freight or duty clearing account that the carrier or customs bill debits later, so what's left in it is the difference between the estimate and the bill.
Why didn't Last Purchase Price change after landed cost?
Landed cost goes into the item's value and average cost, not its purchase price. HX-40 ends at Average Cost 333.00 while Last Purchase Price stays at 310.00. It only picks up landed cost if Include Landed Cost in Last Purchase Price is turned on in accounting preferences.
Do I need the Supply Chain Management SuiteApp for landed cost?
Not for what this guide does. The Landed Cost feature, cost categories, Track Landed Cost on items and the receipt's Landed Cost subtab are enough to type and allocate the charges. The SuiteApp adds landed cost templates and estimated landed cost.
Can I use the freight bill instead of typing the amount?
Yes. Enter the bill with a landed cost item in the matching category. Then on the receipt's Landed Cost subtab, set that category's Source to Other Transaction and choose the bill, and NetSuite brings in the amount before splitting it. This guide types the amounts with Source Manual, so that path isn't shown here.