AcctVantage ERP User ManualsAcctVantage ERP User ManualsAccounts Payable Paying Bills Account for 3rd Party Landed Costs on Purchases (advanced)

Account for 3rd Party Landed Costs on Purchases (advanced)

Did you receive a bill for freight from a Vendor other than who you made the Purchase from? If so, you will need to account for these Landed Costs to this 3rd party.

1. Voucher a payment to the original Vendor.

  1. Enter the Voucher Amount for the PO Line Items for this Vendor just as you would in normal circumstances and then mark the PO Line Items you want to pay.
  2. In the Adj. Cost column you will account for the 3rd Party Cost for each Line Item. In this example there is a $20 charge from a 3rd Party Freight service that has been distributed manually based on the item's proportion of the total Voucher Amount. [e.g. (150/180)*(2400) + 150 = 166.67]. This Adjusted Cost becomes the actual value of the inventory (landed cost).

2. Account for the 3rd Party Costs

Now we need to account for that extra $20 of cost that we are adding to our PO Line Items. We will do so on the General Ledger tab of the same Voucher.

  1. You will need to have a Holding Account setup to clear these charges. This should be an expense account and will typically not carry a balance from month to month (just like most clearing/holding accounts) since we will wash this amount when we Voucher the payable to this 3rd Party. In this example I created an expense account called Third Party Charges.
  2. The amount of this "expense" needs to be a credit to go along with the other $180 worth of liability (credit) we've recorded in the Voucher Amount (payable to the inventory vendor).
  3. If your Amount Remaining To Distribute is $0.00 then click OK to save the Voucher.

3. Voucher a Payable to the 3rd Party Vendor

So, we vouchered a payable to our Vendor for our Purchase and accounted for the 3rd Party Landed Costs. Next, we also have a bill for the freight so we will need enter a Voucher to pay the 3rd Party.

  1. Enter the Voucher Amount just as usual.
  2. Add a new line on the General Ledger tab. Use the same clearing account you used in Step 2.
  3. This time the $20 amount needs to be a debit to offset the credit amount we charged earlier. This will clear the amount out of this holding account. (note: The actual expense will occur as part of CoGS when you make a sale.)

Click OK to save.