Landed costs are a critical aspect of calculating the true cost of your inventory, including expenses beyond the unit cost, such as shipping, tariffs, and production fees. In Settle, managing and adding these costs is straightforward, now with enhanced customization options to better align with your accounting practices and communication needs. This ensures you can track all related expenses accurately and control their visibility.
Add landed costs
Adding landed costs in Settle is streamlined and simple. Here's how to do it:
Create a purchase order (PO)
Click here for a step-by-step guide on how to create a Purchase Order.
Link additional expenses
Note that before adding any additional expenses, landed costs = unit costs.
After creating your PO, WO, or IT, you'll find an 'Additional expenses' tab at the bottom of the document.
Click this tab to link additional expenses related to the inventory or order.
You can add an estimated expense if you don't have the bill yet, or click 'add from existing bill' if it's already uploaded to Settle.
If you link an existing bill, its cost will overwrite any estimated expense cost.
Crucially, for each additional expense line item, you will now see options to customize its allocation and PDF visibility.
These options are described below.
Select expense type
Choose the type of expense you're adding (e.g., shipping, tariffs, surcharges, production costs, inventory, etc.).
Select an allocation model and add cost. There is a default quantity of 1 that you can update, if needed. Read more for a detailed explanation of how allocation models work.
Each expense type helps categorize and allocate costs accurately.
View landed costs
Actual landed costs can be seen on the catalog item and are presented according to your costing method (WAC or FIFO). Projected Landed Costs are available on the Purchase Order.
Customizing additional expense allocation and PDF visibility
For each 'Additional Expense' you add to Purchase Orders, Work Orders, and Inventory Transfers, you now have two distinct customization options:
Allocate to Line Items:
If you choose an allocation method of type None, the expense will not be allocated to individual line items. It will instead be treated as a document-level expense, which can be useful for classifying certain order-related fees as overhead or administrative costs not directly tied to item COGS.
Example: A "$1000 Admin Fee" deselected from allocation on a PO will not increase the landed cost of each individual item.
Show on Supplier PDF:
By default, this option is deselected , meaning the additional expense does not appear on the PDF document sent to the supplier or other external parties. This helps maintain clarity on external documents by excluding internal-facing costs or charges paid to different vendors.
If you select this option, the specific additional expense line item (including its description and amount) will be included in a dedicated section (e.g., 'Additional Expenses' or 'Other Charges') on the generated PDF document sent to the supplier or other external parties. This expense will factor into the PO Total, but not the line items total. This is useful for clearly communicating all charges from the supplier on the Purchase Order PDF.
FAQs
Are there any PO statuses in which you cannot add additional expenses?
No, you can add additional expenses regardless of the PO status. This flexibility allows you to account for all costs at any stage of the purchase order process.
When you duplicate a PO, do landed costs also get duplicated?
No, when you duplicate a PO, the additional expenses, including landed costs, are not carried over to the new PO. You’ll need to manually add any additional expenses to the duplicated PO if needed.
Do additional expenses also sync to QBO along with the PO?
It depends on the nature of the expenses. If they are estimated expenses, they will not sync to QBO. However, if a bill is linked to the PO, whether the expenses sync to QBO will depend on how the bill is configured in your system.
How does my Landed Cost calculation affect my accounting sync?
It doesn't. Landed costs numbers will not be synced back to your accounting platform.
How do I add my shipping box, fulfillment costs, or Amazon placement fees to my landed costs?
Landed costs serve the core of your Cost of Goods Sold (COGS) calculation. COGS generally encompasses all direct expenses related to manufacturing and selling a product, including materials, labor, and freight. Fulfillment expenses, such as packaging, shipping, and handling, are usually classified as part of overhead or selling costs.
What’s the difference between fulfillment expenses and landed costs?
Landed costs represent the true cost of acquiring inventory—including all expenses directly tied to bringing products into your business and making them ready for sale. This typically includes unit costs plus freight, duties, tariffs, and production fees. These costs directly increase your Cost of Goods Sold (COGS) and are factored into inventory valuation.
Fulfillment expenses, on the other hand, are the costs of delivering products to customers. These usually include packaging, shipping, handling, warehouse labor, and marketplace fees (e.g., Amazon placement fees). Because these expenses occur after inventory has been acquired, they are generally classified as overhead or selling expenses, not part of COGS.
In short:
Landed costs = expenses to get inventory into your business and ready for sale.
Fulfillment expenses = expenses to deliver that inventory to your customers.
Can I set global default behaviors for how all future additional expenses are allocated or shown on PDFs?
Not today. Currently, the default behaviors (allocated to line items and not included on supplier PDF) are fixed for all new additional expenses. You will need to manually adjust the toggles for each expense line item as needed.
Can Settle automatically enable/disable the allocation or PDF visibility toggles based on the type of expense (e.g., "Freight" always allocated)?
No, not at this time. Users have full manual control over these toggles for each additional expense
Can I set default preferences for these toggles based on a specific supplier or customer?
This functionality is not available in the initial phase.
Why don't I have enough data to calculate my costs?
To accurately calculate landed costs in Settle, you’ll need to ensure the following data is entered:
Baseline costs: Add your pre-Settle cost data.
👉 Read more on adding baseline costs to your catalog items
Inventory: Enter inventory quantities if you’re using batch-based COGS.
👉 Read more on adding inventory
Purchase Orders and Work Orders: Make sure these are entered in Settle.
Additional expenses: Attach any relevant expenses (e.g., freight, duties) to the appropriate documents.
Inventory receipts: Receive inventory in Settle if you’re using batch-based COGS.
👉 Read more on receiving inventory in Settle