Landed cost is the total price of a product once it has arrived at buyers’ hand.Includes the transportation fee, duty, handling fees, etc.These prices are added and divided to get the actual selling price of the productThe traditional way of calculating landed cost is adding up all the expense and divide them equally to the products.The way of calculating landed cost will vary according to the company and products which they are handling, etc.
HOW TO CONFIGURE LANDED COST IN
• Landed cost is the total price of a product once it has arrived at
• Includes the transportation fee, duty, handling fees, etc.
• These prices are added and divided to get the actual selling price of
• The traditional way of calculating landed cost is adding up all the
expense and divide them equally to the products
• The way of calculating landed cost will vary according to the
company and products which they are handling, etc.
• Configuring the Landed Cost in ERP
• Configure the Landed Cost Type
• Compute Landed Cost for a warehouse transfer
Configuring The Landed Cost In ERP:
Step 1: Login as admin user
Step 2: Go to Settings>>configuration>>Warehouse
Step 3: Check the field “calculate landed costs on products” and make
sure that the field called “Generate accounting entries per stock
movement” is checked as in screenshot no:1
Step 4: Go to Settings>configuration>Purchase
Make sure that the field called “Use 'Real Price' or 'Average' costing
methods” is checked.
Before going to landed cost we have to set accounts, costing methods and
In product master under accounting tab,
Select “Real Time(automated)” as Inventory Valuation
• In product master under procurement tab, select “Real Price” as
• Define stock accounts for Product category.
• Go to Sales >> Configuration >> Product Categories &
Configure the Landed Cost Type
Landed cost types are created as products
These are the expenses which are added as landed cost
Step 1: Go to warehouse>>Configuration>>Landed Cost Type
Create a landed cost for transportation, make product type as service and
splitting method as required.
- By current Cost Price
- By Weight
- By Volume
• Equal :
It equally splits the expenses for the product lines
• Quantity :
It computes greater expense for higher quantity product
• By current Cost Price :
-It divides the expense on cost basis.
-Higher expense for high cost product
• By Weight & By Volume
-It divides the expense on weight and volume of a product.
-Provide the cost price for the landed cost type and the
expense account needed. And then save the form
Compute Landed Cost for a warehouse transfer
Step 1: create a landed cost for the picking
Warehouse> Landed Cost> Landed Costs
Here some fields are given
In that select the journal from the drop down list
Then, in the ‘pickings’ field select the picking (warehouse transfer
In ‘cost lines’ select the landed cost type and then click on compute
Once you click on the compute button you will get the landed cost
computed for each line.
Now click on validate and the accounting entries will be generated for
This blog is created with reference of odoo v8.