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Thomas García, ICON

Nail Your Landed Costs with Microsoft Dynamics GP (Great Plains)


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Having worked on many implementations in multiple countries, it has been easy to ascertain the value of certain less-than-obvious functionalities in an ERP.  One of those functionalities that saves a lot of time and potential errors is the ability to apply landed costs during the reception of items.  This is an important process for distribution companies in countries where most goods are imported, but I believe many domestic customers can benefit from it as well.

Most companies that import goods or companies that incur significant costs for bringing their items to their warehouses have some way of calculating the final costs per unit. In my experience, this is typically done using manual spreadsheets where the individual data for each merchandise receipt is entered and costs are added and prorated using manually-entered formulas.  Not only is this an error-prone method, but the results need to be entered manually by employees into their accounting systems, creating another layer of potential issues and errors.

With a very well-designed process to apply landed costs during the purchase order receiving process, you can really nail your landed costs with Microsoft Dynamics GP (Great Plains).  It is a very simple setup involving the definition of the landed costs you plan to use, and then applying these landed costs with the appropriate values at receiving time.  Dynamics GP simplifies the rest, including:

  • Apportioning landed costs based on value, quantity or volume of items in the receiving.
  • Matching invoices from the product's vendor and from landed costs vendors to the corresponding receiving transactions.
  • Doing all of the accounting including accrued purchases account clearing from receiving to invoice matching.
  • Applying item cost revaluation in cases where the originally matched costs during receiving are different than the final invoice produced by vendors, within set tolerances.

The result is a fully automated process that saves you the use of external spreadsheets and greatly reduces the potential for errors.  You can learn how to configure and use landed costing in Dynamics GP in our "GP Landed Costing" post.  And, if you happen to go to the Great Plains User Group's Summit this year, don't miss our session "Nail your costs with Dynamics GP Landed Costing" where we demonstrate this process step-by-step.  You can read more about GPUG on our ERP Software Blog post "Best of Dynamics GP: Dynamics GP Users Group (GPUG)."

An ERP software should save you time, and spare you errors.  The landed cost functionality is one of those functionalities that really accomplishes both tasks brilliantly, and our Dynamics GP (Great Plains) users love it!  If you want to know more about landed costs, or think you might have use for it on your company, contact us and we will be happy to assist.

By ICON, Dominican Republic Dynamics GP partner

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