When purchasing inventory items, freight-in represents the transportation cost associated with the delivery of goods from a supplier. For accounting purposes, the recipient adds this cost to the cost of the goods received.
Let’s say you purchase an inventory item which has a $20 delivery fee. Rather than posting the $20 delivery fee to an expense account, you can add this cost to the cost of the inventory item.
By not entering anything into the
Qty field of the second line item, the cost will be added to the inventory item without increasing its quantity.
If you purchase multiple inventory items, you don’t have to manually calculate the cost per inventory item. If your freight-in cost is to be allocated to all inventory items purchased, select the
Inventory on hand account, then select
This will allocate the freight-in cost to all inventory items purchased.