Once you have set up the Landed Cost Types that are relevant for your business, you can then assign the expected costs using the "Landed Cost Rules" screen. These rules are then populated onto Purchase Orders (and, when Incoterm Allocation is enabled, Transfer Orders) and registered upon receipt of goods.
With Clever Landed Costs you are able to assign and manage costs at the following levels, from the most specific through to the most generic.
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Item
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Tariff Number (Commodity Code)
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Item Category
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All Items
In addition to the above hierarchy, you can apply an override (within any level) against a Vendor or Country of Origin, meaning that you have full flexibility for cost assignment if you procure the same type of goods from different Vendors or Countries, as things such as Duty may be different depending on such factors.
From Version 4.6.10 of Clever Landed Costs it is possible to specify a Location Code so that you can define a different cost setup when importing goods into different countries that you may have set up as Locations within Business Central.
From Version 5.3.0 of Clever Landed Costs each rule can also have a Starting Date, so that you can enter a new rate in advance and have it apply automatically from the date it becomes effective.
How a rule is chosen
When a Purchase Order Line is created for an Item, the system looks for one rule for each Landed Cost Type, using the first match found in the following order.
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The assignment level is checked from the most specific to the most generic: Item, then Tariff Number, then Item Category, then All Items.
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Within each level, a rule with an Override Level of Vendor for the Buy-from Vendor No. is used first, then a rule with an Override Level of Country of Origin for the Buy-from Country/Region Code of the Purchase Order, and then a rule with no override.
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For each of these, a rule with the same Location Code as the Purchase Order Line is used first. If there is none, a rule with a blank Location Code is used.
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Where several rules match, the one with the latest Starting Date on or before the Expected Receipt Date of the Purchase Order Line is used. A rule with a blank Starting Date always applies.
This means you will be able to assign multiple Landed Costs with the same Location Code using different Assignment Types. Once a rule has been found for a Landed Cost Type, less specific rules for the same Landed Cost Type are ignored.
Note: if the Expected Receipt Date on the Purchase Order Line is blank, the earliest dated matching rule is used. If you enable Re-calculate Rates on Receipt on the "Landed Cost Setup" screen, the rates are worked out again using the posting date when the receipt is posted.
For Transfer Orders the same order is used, with the Receipt Date of the Transfer Line as the effective date and the Transfer-to Code as the Location. See Incoterm Allocation and Transfer Orders.
Opening the Landed Cost Rules screen
The "Landed Cost Rules" screen is shown below for reference and is opened by selecting Landed Cost Rules from the following screens within Business Central.
| Landed Cost Types | Select Landed Cost Rules from the Process menu. All rules for the selected Landed Cost Type are shown, and the Landed Cost Type Code is filled in for new rules. The action is not available if the Landed Cost Type has a blank Calculation Type or already has Fixed Cost Setup records. |
| Items / Item Card | Select Landed Cost Rules from the Item group of the Related menu. The Assignment Type is set to Item and the No. to the Item, so the Assignment Type column is hidden. |
| Tariff Numbers | Select Landed Cost Rules from the Related menu. The Assignment Type is set to Tariff Number and the No. to the selected Tariff Number. |
| Item Categories / Item Category Card | Select Landed Cost Rules from the Related menu. The Assignment Type is set to Item Category and the No. to the selected Item Category. |
| Vendors / Vendor Card | Select Landed Cost Rules from the Vendor group of the Related menu. The Override Level is set to Vendor and the Override No. to the Vendor, so those columns are hidden and you choose the Assignment Type and No. on each rule. |
| Countries/Regions | Select Landed Cost Rules from the Country/Region group of the Related menu. The Override Level is set to Country of Origin and the Override No. to the Country/Region, so those columns are hidden. |
The "Landed Cost Rules" screen is used to define the expected cost, by Landed Cost Type, per base quantity of the Item. The cost can, however, be entered in a different unit of measure for Landed Cost Types that have a Calculation Type of Weight (KG) or Volume (M3). In this case the weight and cubage are copied from the corresponding Item Unit of Measure record and divided by the Qty. per Unit of Measure to give a weight and volume for a single unit. If the weight or cubage is changed on the Item Unit of Measure, it will be updated on any rules that use that Unit of Measure Code.
Landed Cost Rules fields
The following fields are shown on the "Landed Cost Rules" screen, and should be set up as detailed to ensure that the costs will be associated with the relevant Items through the purchase process.
| Assignment Type | Controls whether the rule applies to an Item Category, a Tariff Number, a specific Item or All Items. If left blank the system will show an error when you attempt to create the rule. Changing the Assignment Type clears the No. field. |
| No. | Related to the Assignment Type, and shows the list of Items, Item Categories or Tariff Numbers depending on the Assignment Type selected. This field cannot be edited when the Assignment Type is All Items. |
| Location Code | Not required, but allows you to set up different rates for each Location, where you may have different cost liabilities for the different regions or countries that you manage as Locations. In-transit Locations cannot be selected. Leave blank for a rule that applies to any Location. |
| Override Level | Not required, but allows you to add further criteria of Vendor or Country of Origin in addition to the Assignment Type. This means that you can (as an example) set up a different Duty % for the same Item if you purchase from a different Country of Origin. Changing the Override Level clears the Override No. field. |
| Override No. | Used alongside the Override Level. Shows the list of Vendors for Vendor, or the list of Countries/Regions for Country of Origin. A Country of Origin rule is matched against the Buy-from Country/Region Code of the Purchase Order. This field can only be edited when an Override Level is selected. |
| Landed Cost Type Code | The Landed Cost Type for which the rule is relevant. When you select it, the default values set on the Landed Cost Type are copied to the rule (see below). |
| Landed Cost Vendor No. | The Vendor from whom the landed cost invoice is expected to be received. This is copied from the Landed Cost Type and can be changed for the rule. If it is left blank, the Vendor on the Landed Cost Type is used on documents. |
| Landed Cost Vendor Name | The name of the Landed Cost Vendor No., shown for reference. |
| Starting Date | The date from which this rate is effective. Leave blank for a rate that always applies. When multiple rates exist, the most recent rate on or before the document date is used. You can enter several rules with the same criteria and different Starting Dates to build up a rate history. |
| Calculation Type | Copied from the Landed Cost Type for reference, and used to calculate the Default Cost as described below. |
| Default Cost | The unit cost of the Landed Cost per base unit of the Item. How it is calculated depends on the Calculation Type:
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| Cost per Calculation Unit | For the Weight (KG) or Volume (M3) Calculation Types you can enter the cost per KG or M3. Alternatively, if you enter the cost in the Default Cost field (as a cost against the unit of measure of the Item), the Cost per Calculation Unit is calculated for you. This field can only be edited for these two Calculation Types. |
| Duty % | Can only be edited when the Calculation Type is Duty. It is filled in from the Duty % of the Tariff Number linked to the Item, or of the Tariff Number itself when the Assignment Type is Tariff Number, and can be changed manually. |
| Cost % | Entered when the Calculation Type is Percent, and can only be edited for that Calculation Type. |
| Include in Duty | A reference to the same field on the related Landed Cost Type. |
| Unit of Measure Code | For Item rules, this defaults to the Purch. Unit of Measure of the Item. It can only be changed for the Weight (KG) and Volume (M3) Calculation Types, and changing it updates the Unit Weight and Unit Volume. |
| Unit Weight | The weight of one unit, taken from the Item Unit of Measure (or from the Gross Weight on the Item Card when the unit of measure is the base unit and has no weight). Used to calculate the Default Cost for weight-based costs. |
| Unit Volume | The volume of one unit, taken from the Item Unit of Measure cubage (or from the Unit Volume on the Item Card when the unit of measure is the base unit). Used to calculate the Default Cost for volume-based costs. |
Default values
When you select the Landed Cost Type Code on a rule, the default value set on the Landed Cost Type is copied to the rule: the Default Cost of the type is copied to the Cost per Calculation Unit for Weight (KG) and Volume (M3), or to the Default Cost for Per Piece, and the Default Cost % is copied to the Cost % for Percent.
Note: an Item can only have one Landed Cost Type with the Duty Calculation Type. If you try to add a second, the system shows an error telling you which Landed Cost Type already uses Duty.
Changing a rate
When you add a rule or change its cost, weight, volume or percentage, and there are open Purchase Order Lines or Transfer Lines (with a quantity still outstanding) that use that Landed Cost Type, you are asked whether you want to update the rate against the existing Document Landed Costs. Answer yes to update the documents that the rule applies to. Documents that are covered by a more specific Vendor or Country of Origin rule are not changed.
Base Cost and Overhead Rate
Note: the Base Cost used in some of the calculations detailed above is set on the Item Card, as shown below.
On a Purchase Order, the base used for Duty and Percent costs is the Base Cost on the Stockkeeping Unit for the Location (where set), otherwise the Base Cost on the Item for Items using the Standard costing method, otherwise the Direct Unit Cost (LCY) of the Purchase Order Line.
From Version 4.6.11, the Base Cost and Overhead Rate have also been added to Stockkeeping Units (SKUs). The Overhead Rate on the Item is kept up to date automatically as the total Default Cost of the Item rules that have no override and no Location Code. Where SKUs are in use, the Overhead Rate on the SKU is calculated in the same way from the Item rules for that Location.
Note: you cannot change the Overhead Rate on the Item Card manually while the Item has Landed Cost Rules, as it is managed by the system.
Note: the Overhead Rate is not used for any Landed Cost Type that is set up to use the Charge Item Cost Treatment that was introduced in Version 5.0.0 of the application.
When using SKU functionality, if the Base Cost of the Item is different depending on the receiving Location, you should maintain the Base Cost against the SKU rather than the Item. This is because it will be used in the above calculations in priority to the Item Base Cost. If it is not set, the Base Cost from the Item will be used. For more about the Landed Cost fields on Items, SKUs and Tariff Numbers, see Item, SKU and Tariff Setup.
If you delete an Item, its Item Landed Cost Rules are deleted with it.
For costs that apply to a whole document or container rather than to each Item, see Fixed Cost Assignment. To see how rules are applied to orders, see Purchase Orders.