Landed Cost Allocation

This tab lists the vendor bills that your purchase orders create and lets you spread freight, duties, and handling costs across the orders they belong to. The result is a true landed cost per unit, so margins reflect what the goods really cost to get to your shelf.

Key capabilities

• A list of every bill created from a purchase order, with vendor, status, due date, amount, and balance
• Five summary cards: Total Open Purchase Orders, Total Outstanding Balance, Forecasted, Awaiting Receipt, and Paid
• PO, Receipt, and Paid check marks on each row, plus a three-way match result
• Recompute to re-run the match after a bill or receipt changes
• Allocate landed cost to split one bill across several received purchase orders
• Three cost layers (Freight, Duties, Handling), each with its own split method
• A live Bill amount, Allocated, and Unallocated total that blocks over-allocation
• Search, a status filter, and saved views

How it works

Submitting a purchase order creates a forecasted bill. Receiving it turns that bill into a received bill and records the material cost per unit. Freight, customs, and warehouse invoices usually arrive separately and often cover several orders, which is what the allocation step handles.

flowchart LR
  po["Purchase order submitted"] --> forecast["Forecasted bill"]
  forecast --> receive["Order received: bill received, cost recorded"]
  receive --> match["PO / receipt / bill match"]
  freight["Freight, duty, or handling bill"] --> allocate["Allocate landed cost"]
  receive --> allocate
  allocate --> cost["Landed cost per unit"]

How to use it

1. Open Landed Cost Allocation from the Inventory sidebar (the page and its mobile tab are titled Accounts Payable).
2. Review the summary cards, then narrow the list with search or the status filter: Forecasted, Received, Partially paid, Paid, or Canceled.
3. Click a row to expand it. Check the PO Match, Receipt Match, and Paid Match tiles and the amount, paid, balance, and due date.
4. On a PO-linked bill, read the Three-way match panel. Click Recompute after anything changes.
5. Click Allocate landed cost on the bill that holds the freight, duty, or handling charge.
6. In the dialog, pick the Freight, Duties, or Handling tab, choose a Split basis, and type an amount next to each received purchase order. Split remaining evenly, By PO value, and Clear speed this up.
7. Watch Allocated against the Bill amount. When it fits, click Save allocations.
8. Click View Full Bill to open the bill in Accounts Payable for approval and payment.

Pro tips

• Only received or completed purchase orders can take an allocation. Receive the order first, or the dialog says there is nothing to allocate to yet.
• Use By value (pro-rata) for duties, which scale with what the goods cost, and By quantity (per unit) for freight and handling. Those are the defaults.
• You can split one bill across layers, for example part Freight and part Handling. All three tabs save together.
• Open the dialog again at any time. Saving replaces the earlier allocation, so you can correct a split without double counting.
• A due date shown in italics with "(est.)" is a forecast. It firms up once the real bill is entered.
• A purchase order with an allocation cannot be deleted; cancel it instead. See Purchase Orders.

In-depth guide

What allocation does

Each amount you enter is spread across the products on that purchase order and added to the chosen cost layer in their landed cost per unit. By quantity gives every unit the same add. By value weights each product by its line value, then divides back over its units. Products on the order with no recorded receipt cost are skipped, since there is nothing to add to. The change shows up in the cost breakdown on the Landed COGS tab and in Production & Costing. That tab is shown for CPG businesses only; this one is not.

Allocation does not edit the bill, its payments, or what you owe the vendor. It only refines per-unit cost.

Reading the match

By default units must match exactly, and the amount may differ by up to the larger of $5 or 1% of the order total. The expanded row shows Qty drift (received minus ordered) and Amount drift (bill minus order), with a plus or minus sign.

Check marks

PO means the bill ties to a purchase order. Receipt means goods were received (the bill is Received, Partially paid, or Paid, or has a received date). Paid means the bill is fully paid. The usual order is PO, then receipt, then paid.

Summary cards

Total Open Purchase Orders adds up every bill that is not Paid or Canceled. Total Outstanding Balance subtracts payments already made. Awaiting Receipt counts bills already in Received or Partially paid. The list loads up to 200 bills.

Empty state

With no bills, the tab says "No PO-linked bills yet" and reminds you that submitting a purchase order creates a forecasted bill. Open full Accounts Payable takes you to the bill inbox. Inventory pages need the Commerce & Inventory add-on.