MPH WMSLanded Cost
Allocate shipping, customs, and other costs to your purchase orders for accurate inventory valuation
Landed cost captures the true total cost of getting goods into your warehouse - not just the supplier's unit price, but also shipping, customs duties, insurance, and any other expenses incurred along the way.
Why landed cost matters
If you buy 100 items at 50 kr each and pay 500 kr for shipping, your real cost per item isn't 50 kr - it's 55 kr. Without landed cost, your inventory valuation will be understated and your margins will look better than they really are.
Landed cost gives you:
- Accurate inventory valuation - stock value reflects what you actually paid
- True margins - gross profit calculations use the real cost of goods
- Better pricing decisions - know your true cost floor
Creating a landed cost sheet
- Go to Purchasing and open a purchase order
- Click Landed Cost
- Give the sheet a name (e.g., "Import costs Q1")
- Choose an allocation method (see below)
- Add cost components:
- Enter a name (e.g., "Ocean freight", "Customs duty", "Insurance")
- Enter the amount, in the purchase order's currency
- Click Save
The system automatically calculates how much cost to allocate to each PO line.
Allocation methods
The allocation method determines how the total landed cost is distributed across the purchase order lines.
| Method | How it works | Best for |
|---|---|---|
| By value | Proportional to line value (unitCost × quantity) | General purpose - higher-value items absorb more cost |
| By quantity | Proportional to number of units | Items of similar size and weight |
| By weight | Proportional to total weight (quantity × item weight) | Freight charges that scale with weight |
| By volume | Proportional to total volume (quantity × item volume) | Container or space-based shipping charges |
| Equal | Split evenly across all lines | Fixed per-line charges (e.g., inspection fees) |
Example: By value
| PO Line | Unit Cost | Qty | Line Value | Share | Allocated Cost |
|---|---|---|---|---|---|
| Item A | 100 kr | 10 | 1,000 kr | 40% | 200 kr |
| Item B | 50 kr | 30 | 1,500 kr | 60% | 300 kr |
| Total | 2,500 kr | 500 kr |
Landed unit cost
For each line, the landed unit cost is:
Landed unit cost = Unit cost + (Allocated amount ÷ Quantity)In the example above:
- Item A: 100 + (200 ÷ 10) = 120 kr
- Item B: 50 + (300 ÷ 30) = 60 kr
Cost components
Common cost components to include:
| Component | Description |
|---|---|
| Freight / Shipping | Ocean, air, or road freight charges |
| Customs duty | Import duties and tariffs |
| Insurance | Cargo insurance premiums |
| Brokerage | Customs broker fees |
| Port charges | Terminal handling, demurrage |
| Inspection | Quality inspection or testing fees |
| Currency conversion | FX fees if paying in foreign currency |
You can add as many components as needed. Each component has a name and an amount. All amounts are in the purchase order's currency - see Multi-Currency Purchasing for how the allocated cost is converted into your stock valuation.
Applying to stock
Once the purchase order has been fully received, you can apply the landed cost sheet to stock:
- Open the landed cost sheet
- Review the allocations - they are recalculated based on quantities actually received (not ordered)
- Click Apply to stock
Applying needs the purchasing:landed_cost permission (admins have it by default). Anyone can
edit and save the sheet; only the apply step is gated, because it rewrites stock valuation.
What applying updates
When you apply a landed cost sheet, four things are updated:
- Goods receipt lines -
unitCostandtotalCostare updated to include the allocated landed cost - Stock level batches - the
unitCoston each batch (matched by receipt number) is updated - Inbound stock movements - the receipt's movements are updated with the new unit cost
- Every other movement on the batch - outbound fulfillment (cost of goods sold) rows and any adjustments that consumed the batch are re-rated to the same landed unit cost
This means your inventory valuation immediately reflects the true landed cost, and units that already shipped from the batch carry it in cost of goods sold as well.
The allocation itself is computed in the PO currency. If the goods were received into a warehouse with a different currency, the landed unit cost is converted using the rate the receipt captured, so the batch cost stays consistent with what was originally booked.
Applying is repeatable. When a late freight or customs invoice arrives, edit the sheet, click
Save, then Re-apply to stock. The sheet shows Applied - not re-applied until someone with
the purchasing:landed_cost permission re-applies it. Because re-applying re-rates units that
already shipped, historical valuation and cost of goods sold reports change retroactively.
Applying always recalculates the allocation from the chosen method over received quantities, so a manual per-line override entered before applying is replaced at that point.
Landed cost and valuation methods
The landed unit cost flows into all four valuation methods:
- FIFO - uses the batch unit cost (which now includes landed cost)
- WAC - weighted average is recalculated with the landed unit cost
- Standard cost - unaffected (uses the item's fixed cost price)
- LPP - uses the latest receipt's unit cost (which may include landed cost)