Skip to main content
A
arkvalleyinfo
October 16, 2018
Solved

How can I allocate shipping and freight costs to the inventory items purchased?

  • October 16, 2018
  • 1 reply
  • 0 views

I have a supplier bill for inventory items purchased with a shipping expense to ship the items to my address in the US. Then I have a separate bill with a freight vendor to ship the items to offices overseas. How can I allocate these shipping and freight expenses to the inventory items purchased using quickbooks online?

    Best answer by Rustler

    QB does not handle landed costs, so you have to use a work around

    on the original purchase, add a portion of the shipping to each item total.
    On the bill, select the item, enter the qty received, and click over to total amount and enter the item cost + a portion of the shipping, when you click out of the total cost block QB will do the per item rate.

    When you get third party shipping, pay the bill using a clearing expense or asset account (it makes no difference which kind of clearing account you set up in teh chart of accounts).

    then edit the original bill
    for each item, increase the item total cost by a portion of the third party shipping
    then use the accounts section at the top, select the clearing account, and  enter the full amount as a negative number

    save and click though any warnings you get about payments being applied

    QB will redo the purchase cost per item as of the date of the bill, and if any item have been sold in the interim, QB will make COGS adjustments resulting from the increased per item cost.

    1 reply

    Rustler
    RustlerAnswer
    October 16, 2018

    QB does not handle landed costs, so you have to use a work around

    on the original purchase, add a portion of the shipping to each item total.
    On the bill, select the item, enter the qty received, and click over to total amount and enter the item cost + a portion of the shipping, when you click out of the total cost block QB will do the per item rate.

    When you get third party shipping, pay the bill using a clearing expense or asset account (it makes no difference which kind of clearing account you set up in teh chart of accounts).

    then edit the original bill
    for each item, increase the item total cost by a portion of the third party shipping
    then use the accounts section at the top, select the clearing account, and  enter the full amount as a negative number

    save and click though any warnings you get about payments being applied

    QB will redo the purchase cost per item as of the date of the bill, and if any item have been sold in the interim, QB will make COGS adjustments resulting from the increased per item cost.

      A
      arkvalleyinfoAuthor
      October 16, 2018
      Thank you Rustler for your response, I appreciate it!

      What If I decided to calculate the landed cost on a separate excel sheet and I entered the shipping cost as a line item, would it be best to create a service item called "Shipping" and enter the shipping cost in the items section or is it best to enter it in the accounts section directly? and what is the difference between the accounts section and the items section in this case?

      In this case, how would I reflect the third party freight cost on the items bill, if at all? Do I enter it as a negative amount in the accounts section and a positive amount in the items section, if that makes sense at all?
      Terms & ConditionsAccessibility statement