In our related article “Challenges for wholesale distributors – calculating landing costs”, we discussed the challenges related to calculating landed costs, and the consequences of not tracking these costs accurately. Here we explain how NetSuite can make this process more intuitive, accurate and efficient.
NetSuite Advanced Inventory has native functionality to calculate landed cost across three dimensions:
- Quantity, which would be used if you were charged a handling fee per item;
- Weight, which would be used if you were charged a shipping fee based on weight;
- Value, which would be used to apply the appropriate duty imposed by importing through customs.
This is by no means an exhaustive list but should give a good idea as to the use case for each dimension.
Within NetSuite you can either apply arbitrary costs to the item receipt process, which would cause a non-posting calculation of inventory value to take place, or the much more accurate and desired “based on existing transaction”; this would link the value of an invoice to the calculation, and importantly, when certain services are not invoiced until many weeks or months after delivery, can be done so retrospectively.
In doing so, NetSuite allows you to get a fully audited landed cost for your inventory and allows a much more accurate report on inventory profitability. Understanding your landed costs enables you to more effectively manage your supply chain from end-to-end and be sure your investments deliver a return.
If you would like to find out more about how NetSuite could help with the challenges associated with landed costs, then please don’t hesitate to get in touch with one of our experts.
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