Utilizing Landed Cost Functionality

Written By: Bob Callanan of Business Ready Solutions

from July 9, 2013

The Landed Cost functionality in Microsoft Dynamics GP is used by many customers.  It provides an efficient means for capturing all the costs associated with bringing a product into a warehouse which gives management the information it needs to price products.

A Microsoft Dynamics GP customer recently completed a unique implementation of landed cost.  This client organization purchases raw materials from one vendor and ships it to a second vendor that adds a coating to the product. The second vendor then ships it to the client. The client receives an invoice from each of the suppliers and wanted to be sure all the cost ultimately went into the product.

Bill of Materials was considered but a much simpler and more effective solution using Landed Costs emerged.  A new landed cost ID and a Group named COATING was created and linked to the vendor that provides the coating services. A fixed amount per unit based was assigned upon the agreement with that vendor.  When the client creates purchase orders for the raw goods, Microsoft Dynamics GP automatically includes the COATING Landed Cost on the PO and the system is set to expect an invoice from both the supplier and the coating service provider. 

By Bob Callanan, Business Ready Solutions