Issue:

How can I include the cost of shipping into the cost of the inventory items I received from my vendor when entering the vendor invoice?


Solution:

We would suggest using the Unit Cost Override feature. You would enter the freight invoice as normal, but then perform a unit cost override on the individual item to incorporate the freight cost. Here's how this might work should you choose to implement the process:

Step 1: Go to Administration>Inventory>Pricing>Unit Cost Override.

Step 2: Enter Item Code.

Step 3: Select Inventory GL Account.

Step 4: Current Unit Cost will be displayed, enter New Unit Cost that includes the add-freight value.

Step 5: Click Save.

 

When this adjustment posts, assuming you have increased the unit cost, Inventory will be Debited and an Expense Account will be credited. The expense account credited will be determined by the accounting default you have setup for unit cost overrides under Administration>Accounting>General Setup>Accounting Defaults>Inventory.  It will either be the Product Line COGS account or an account of your choosing.

 

Once the unit cost override is complete, the freight cost would be incorporated into the value of the inventory item(s). The cost will ultimately be expensed at the time the item is sold at which point Inventory is reduced and COGS is increased.