How it works
For Charge Item treatment on transfers, the expected stevedore cost is posted as separate Item Charge Value Entries against the transfer receipt Item Ledger Entry, which adds the cost directly to the item's inventory value.
Clever Landed Cost then posts a G/L correction to create an accrual so that the cost can then be matched against the stevedore invoice when it arrives.
When the stevedore invoice arrives, the accrual is reversed and an additional actual cost is posted as a Charge Item Value Entry for any variance between the expected and actual cost to value the inventory correctly. Because this flows through Business Central's standard Value Entry mechanism, the actual cost of stevedore charges becomes part of the Item's true inventory cost and propagates to COGS through cost adjustment.
The accounts used for posting are derived from the standard Business Central Inventory and General Posting Setup.
Stage 1 - Transfer Receipt
Business Central posts the standard transfer entries and then the expected value for stevedore is posted as an Actual Item Charge Value Entry, due to the fact that Transfer Item Ledger Entries are always processed as Actual Costs in Business Central. The cost is then moved from the Direct Cost Applied account to the Landed Cost Invt. Accrual Acc. (Interim) to represent the cost as an accrual rather than actual cost at this point.
| Account | Debit | Credit | Source |
| Inventory | 5.00 | LC - Actual Item Charge Value Entry | |
| Direct Cost Applied | 5.00 | LC - Actual Item Charge Value Entry | |
| Direct Cost Applied | 5.00 | LC - Move cost to accrual account | |
| Landed Cost Invt. Accrual Acc. (Interim) | 5.00 | LC - Create stevedore accrual |
Balances: Inventory 5.00 Dr ~ Landed Cost Invt. Accrual (Interim) 5.00 Cr
Stage 2 - Landed Cost Invoice
When you set the Landed Cost Type Code on the purchase line, the Type is set to G/L Account using the Purch. Account from the "General Posting Setup" of the "Landed Cost Type" Charge Item No. Business Central posts the invoice against this account. The Landed Cost functionality then posts the reversal for the accrual (which moves the expected cost back to Direct Cost Applied) and posts any variance as an actual Value Entry cost posting.
| Account | Debit | Credit | Source |
| Landed Cost Purch. Account | 8.00 | BC - Purchase invoice line | |
| Payables Account | 8.00 | BC - Vendor liability | |
| Direct Cost Applied | 5.00 | LC - Reverse expected stevedore cost | |
| Landed Cost Invt. Accrual Acc. (Interim) | 5.00 | LC - Reverse expected stevedore cost | |
| Inventory | 3.00 | LC - Post Variance for Actual stevedore using Item Charge Value Entry | |
| Direct Cost Applied | 3.00 | LC - Post Variance for Actual stevedore using Item Charge Value Entry |
If the actual cost is the same as the expected cost, no variance Item Charge Value Entry is posted. The same accrual reversal and variance postings are made if the expected cost is written off using the Landed Cost Journal, in which case the variance is the difference between the expected cost and the Cost Amount (Actual) entered on the journal.
After posting the receipt and the variance, Clever Landed Costs runs a cost adjustment for the Items affected, so the updated costs flow through to any usage of the Inventory straight away. The standard Adjust Cost - Item Entries batch job will also pick up any remaining adjustments when it next runs.
Final Position
The Item's inventory cost is increased by 8.00 which is the true cost of the stevedore charges. There is no variance account because the full cost is held in inventory. When the item is sold, Cost of Goods Sold (COGS) will also be increased by 8.00 and if the goods were sold prior to the processing of the stevedore invoice, Business Central's cost adjustment routine will automatically update COGS to reflect changes in the inventory cost.
| Account | Balance | Type |
| Inventory | 8.00 Dr | Balance Sheet |
| Direct Cost Applied | 8.00 Cr | Intermediate |
| Purch. Account | 8.00 Dr | Intermediate |
| Payables (stevedore vendor) | 8.00 Cr | Balance Sheet |
| Landed Cost Invt. Accrual Acc. (Interim) | 0.00 | Cleared |