Import Landing Cost in Business Central

The imported goods comes with other cost like freight, insurance and custom house agent charges, etc. The handling of the landing cost would be as follows:

1. The purchase order can be made with the purchase cost in currency other than INR with a conversion rate. The Business central we can make the purchase order in any currency as per the currency master created. As clients can work in more different countries/regions, it becomes very important for them to trade and report financial information in more than one currency, i.e. the vendor ledgers has to be taken in Indian and Vendor currency both. The vendor would settle the accounts with us in their currency only. The local currency as defined in GL Setup page and the Chart of Accounts. Once the LCY has been defined, the same is used as a blank currency, so when the Currency field is blank, it means that the currency is LCY. IN currency set up master, currency codes for each currency is added.
   
   

2. When the purchase receipt is posted in the business central, the inventory is updated as per the conversion value do purchase order. The system post the expected cost of inventory in the chart of accounts. In business central, the items have item ledger entries and value entries. The values entries are the cost entries which are created both at the time of receipt of the entries and at the time of invoice of vendor. The value entry are posted with the expected cost at the time of purchase receipt, the same is reversed at the time of purchase invoice posting and the actual value of invoice becomes the inventory value. The expected cost entries are ported to report the value of goods which have been received but the invoice of vendor has not been posted. We cannot have stock with zero value till the invoice of vendor is not posted. This create the under valuation of the stock in hand.
   
   

3. On receipt of purchase invoice with the bill of entry, the purchase invoice is posted with the actual conversion rate of bill of entry. The expected cost of inventory posted in the chart of accounts is reversed with the actual cost of inventory as per the purchase invoice posted.
   
   let's say if we have a LAPTOP as the item and we purchase the 10 quantity of stock for $1500. So, the unit cost is $150 The Purchase Order has been created of this value. When the stock is received and warehouse receipt of the stock is posted, item ledger entries and value entries would be posted with expected cost $1500. In this case following entries would be passed by the system:
   
   Interim Inventory A/c would be debited (with Expected Amount) $1500 Dr
   Inventory Accrual A/c would be credited (with Expected Amount) $1500 Cr

   When the actual invoice comes, that has the unit cost $160, which is $10 high as compared to purchase order. On posting the voucher of the purchase invoice, the entries would be as follows:
   
   Reversal of Accural Entries:
   Inventory Accrual A/c would be Debited (with Expected Amount) $1500 Cr
   Interim Inventory A/c would be Credited (with Expected Amount) $1500 Dr

   Invoice Entries
   Inventory A/c would be debited (with Actual Amount) $1600
   Cr Direct Cost Applied Account (with Actual Amount) $1600
   
   Purchase (Imports) Account would be debited (with Actual Amount) $1600
   Vendor Payable A/c would be credited (With Actual Amount) $1600
   

4. The item charges functionality of purchase invoice can be used to post the additional charges in Indian currency connecting the purchase receipt of the order. The inventory accounts and item cost per unit is appreciated with the additional cost loaded on the purchase to receipt of the import order.
   
   

5. The payment when made for the vendor invoice, the difference of invoice conversion rate and payment conversion rate is posted as forex gains and losses automatically by business central.
   
   Contact us for further information contact@pristinebs.co.in