adding freight cost to inventory item

[frogchild0967]

If you have an inventory item that you would like to add freight cost to, is there any way to handle that? I am using Enteprise-Manufacturing & Wholesale Edition-5.0.

[plg]

What you want to do is called "Landed Cost", the term comes from importers who want to include not only shipping, but brokerage fees, storage and other costs in their final cost per item.

QB does not really have that option. I include shipping in my inventory costs by simply calculating the percentage of the total invoice that is shipping and then adjusting the line items by that percentage. I make it come out right.

But, I'm fortunate in that my shipping costs are always prepaid and shown on the invoices. If shipping is a seperate bill, it is pretty hard to do and still show different checks or A/P's for both the supplier and the shipping company.

Maybe in Version 435 Intuit will relaize that not everyone does business the way they want them to. Many folks either use, or would like to use landed costing, but QB does not acknowledge there is such a method of inventory costing.

My point of sale program allows me to distribute shipping in one of two ways. I can either divide it evenly by the total items and distribute the same amount to each item, or I can spread it proportionately by item cost. I can hold the PO open until I have the freight bill, even showing the goods in stock, but not finalizing the cost until the shipping is entered.

Maybe this is too much for the Intuit folks to figure out?

[amie]

I couldn't decide whether this should be a reply or a new thread. This, however, is along the same lines as the package not handling landed cost. Intuit has the expense tab there and they thing that is enough. When the freight comes in, to them, it should go on the expense tab. That's not how alot of manufacturing and distributing packages handle it and it's not the way the business wants to handle it. Thank heavens that we can do the percentage multiplication in the amount column. That at least calms down the client who purchased the package thinking it would do what the old DOS program that they abandoned for this modern package!
Here's my thing, I'm very happy that Intuit finally recognized the manufacturing indusry in the past few years. But they seem to be giving it to us in small doses. It's hard, as an advisor, to convince a company to switch from their antiquated package to this "modern" package when the old package actually does more to fit the business. Let's take somethng so simple as price breaks. We have Price Levels but why not price breaks? I lose the potential client's interest when I tell them that something so necessary is just not there.
We also desperately need a feature that will do UOM conversions.I guess that's why we have the add ons though. It's just not a true manufacturing package and after they invest the money and then realize they have to spend another $2500 on Fishbowl, they just aren't happy campers. They figure it's cheaper to stick with their old DOS program.
Don't get me wrong - I am one of the biggest fans of Quickbooks. My business is thriving and bursting at its seams from the work I get from Intuit. I just wish they would carry thru with a few things that are really needed to make the conversion of some non believers.
So while I'm at it, Intuit, we also need more the one quantity column so we can pull in the rental businesses and please do something about not showing vendor credits on the voucher! That one really infuriates the clients. Otherwise, I love the product!

[rusty3200]

As a work around.

When you receive items that you know or can approxomate shipping cost on, you can

1. On the items tab, increase total cost for the items by the total frt cost.

2. On the expense tab, enter a credit for the frt added in 1 above.
Credit the frt expense account.

When you receive the frt bill, code it to the frt expense account.


Karl Irvin
www.q2q.us

[amie]

I guess you missed my point. Yes, there are workarounds but I think what we're lookling for here is a more expedient way to add freight costs, freight insurance, etc to the item cost without breaking it down one item at a time. When we do foreign conversion AND freight breakdown on huge shipments, we have to go out to excel first to do all of the math. By theway, why does Canada have foreign converstion in their Quickbooks and not the USA? I think I was just trying to make a point that we need a few more bells and whistles in the Manufacturing version for it to truly be a Manufacturing version without having to do all of the workarounds.

[rusty3200]

Amie

I wasn't responding to your post. I was responding to frogchild 0967.

Perhaps someone else can read and respond appropriately to your post.

[frogchild0967]

Thanks for all your help! Hopefully someone at Intuit reads these and will get the point. Our main problem is we buy large dollar items and the freight bill is usually separate from the product invoice. Hopefully the freight bill will come quickly after the other. I will use the workaround for the time being. Thanks!

[rusty3200]

frog


If the freight bill is material to your P/L

Credit the freight added to the item to a balance sheet account such as Estimated Freight Payable instead of to freight expense.

When you get the freight Bill, code the original estimated amount to the Estimated Freight Payable account and the rest, if any, to a freight expense account.

[Donatmontana]

I'm just getting back into the accounting field after a long absence. I work for a boot wholesaler. Generally Accepted Accounting Principles and the IRS expect Freight In to be added to Inventory. It's not acceptable to post freight in charges to an expense account unless they are not material to cost of goods of sold. It is surprising that Quickbooks does not consider GAAP and the IRS as important since they do not provide an easy way to add freight in to inventory. I'm still in the process of trying to figure out how to do it. I THINK I WOULD RATHER FIND OTHER ACCOUNTING SOFTWARE THAT DOES RECOGNIZE GAAP IN THIS AREA.

This is a must, absolutely essential, for anyone with material freight-in charges.

[plg]

From the first day they have operated under IAAP. Intuit Approved Accounting Practices. And their attitude has constantly been "Our way, or the highway."

[Primo Delgado]

The best way is to determine what % the freight and other charges is of the raw cost and compute the landed cost using Excel. This information is used as unit cost in the bill for the goods that is registered in QB.

In order for the bill to square off with the original invoice from the supplier the shipping charges used to compute the landed cost must be entered in the expense window of the bill but as a negative charge. This way you record the landed cost and an offset for the charges that were entered when the shipping charges were paid.

There is no double charges since the supplier's
bill is entered with the correct total amount and the shipping charges are also entered with the correct total amount when the bills for those charges were paid to different suppliers

[suzannemead]

It would be helpful if anyone interested in getting this problem solved would use the Feedback button in the Quickbooks program. They actually do listen. Right now I am in the process of making suggestions for future programs and will include the problem at hand.

[RobJoy]

And so say all of us.

I wrote an Access application to handle landed cost for our imports. I get freight & duty bills with paperwork to identify which goods they apply to, then my application calculates freight per unit of measure (we have accurate weights of all items) and duty by value. The material cost, freight and duty bills are posted to the Balance Sheet under the Inventory Asset group of accounts, then I post a bill that deducts the freight and duty postings and 'revalues' the item costs. I end with no freight and duty in the balance sheet, it's all in the item costs.

If I can write that, so could Intuit.

Suzanne, you remind me that I keep meaning to spend a day or two posting to Feedback!

[suzannemead]

Joyce - You really should make the suggestions to Intuit. I see a few things in QB2009 (Beta) that I know were frequently requested so they do consider what the user wants. I sent in the suggestion re: Landed Cost to Intuit yesterday.

[tpeck]

Also QuickBooks offers third party applications in the Intuit Marketplace. This software is designed for import/export companies and addresses landed costs http://marketplace.intuit.com/AppID-2608-Overview.aspx