Inventory - Landed Cost

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That is essentailly what I do now. Book to seprate accounts then make a Jounral entry periodically to capitalize those costs to inventory. The JE will allow zero quantity and value by item. Also allows me not to have to fake up the invoice. If the invoice has one line for freight then I enter one line for freight.

Thinking aloud… It would be nice to one day have a way to ‘pro-rate’ freight and other charges to distributions across all the invoice lines. At present invoice lines and distributions are one in the same…

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You have,

Product…100
Product…100
Freight…50 in the invoice and then create a journal entry :
Freight
Inventory…
??

Wouldn’t that change the calculation of cogs at the end of the year?

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Dear Lubos… is the issue resolved (prgram has been changed) if so can you share some guidelines…

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Thanks for the update … i can help a bit but still the issue is: We as importer

  1. We make the payment to supplier in advance
  2. We receive good after one month
  3. We pay the bill of clearing agency after one month

So the above transactions cannot be post at one time … ??? please advise is there any way to allocate the expenses in inventory cost even by making seprate entries…

Also is there any way to manage stock by First In First Out (FIFO)…???

26

1 when you make advance to supplier follow this.

Go to Spend Money and select Supplier Credit under Account and select the supplier.

2 When Goods are received, issue a purchase invoice to the goods supplier. Manager will apply the credit paid in advance so the invoice will immediately show PAID IN FULL.

3 When the Clearing house bill arrives raise a purchase invoice to the clearing agency, but go to Inventory on hand and select the inventory but don’t enter any quantity there, the amount will be capitalised to the inventory cost. See the picture below for clarification.

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This will increase the cost of inventory but the inventory quantity will be the same so the average cost of the inventory will reflect the clearing cost too.

So you can comfortably pay your two vendors separately.

The last time I checked, Manager was using FIFO.
In the future users must be able to select either FIFO or Weighted Average. Companies with a Policy of Weighted Average will have problem switching to manager because a change in policy will require a retrospective application which will be daunting.

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Actually, Manager uses average cost method. See [16.3.50] Added "Average cost" column to "Inventory Items" tab for some related information.

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@Tut wow , I thought the average cost thing here was just to guid users to avoid pricing inventory below average cost of the inventory.
See

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I am introducing people to manager.io all the time so I have to clarify my confusion, I need @lubos’ comment.

Thank You Tut

29

Hmmmmmm. I see in the thread that you posted a screen shot of that in Nov 2014 @lubos said FIFO. In May 2014, at What inventory system is adopted by Manager? he said weighted average. In June 2015 he said perpetual weighted average cost, and cited the same forum topic. In February 2014, at How to treat inventory items with no price - #5 by lubos, he also said perpetual weighted average cost.

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Manager is using perpetual weighted average which is the most accurate method to track cost of goods sold. I came to conclusion that FIFO should never be used actually.

Even this topic demonstrates why FIFO (or LIFO) is harmful. When you capitalize delivery costs to inventory items you are essentially adding cost to inventory on hand without increasing quantity. How do you imagine FIFO (or LIFO) should handle this… and that’s just one example where FIFO falls short.

Here is very good video which explains how perpetual weighted average works.

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