Cross-Border Trade Operations ERP
Landed cost: understand the true cost of an import
Landed cost brings the purchase price and the direct costs of getting goods to their destination into one cost basis. This guide explains the business concept; automated ERP allocation is not yet complete.
Purchase price is not the final cost
Use relevant costs for the transaction and avoid counting the same charge twice. Treatment of recoverable taxes and bank costs should follow your accounting policy.
- Supplier price + international freight + insurance + customs/duties + clearance + port/handling + inland transport + relevant direct/bank costs = true landed cost
Estimated versus actual landed cost
Estimate costs before committing to a purchase. Replace estimates with actual invoices and charges as the shipment progresses, then review the difference. Keep the estimate date, currency and assumptions with the calculation.
Choose a defensible allocation basis
Shared freight or handling may be allocated by weight, volume, quantity or value, depending on the charge and goods. Record the method, check that allocated totals match the original charge and review exceptions. These are allocation concepts, not a claim of automated allocation in this ERP.
Understand the effect on margin
Selling price less supplier price can overstate the available margin. Compare revenue and landed cost on a consistent currency and unit basis, and distinguish expected margin from the result after actual costs are reconciled.
Connect costs to the shipment
Shipment charges and import-shipment cost centers provide operational cost context today. A final allocated per-item landed cost remains a product direction. Design partners can help validate the charge categories, allocation rules and reconciliation steps their teams need.