The question behind the setting
When you add an extra cost to a purchase order, ask: who bills me for this?
- The vendor bills it (it appears on their invoice) — the charge belongs in the PO total, so the PO matches the invoice. Turn Add as fee on.
- Someone else bills it (freight forwarder, customs broker) — the charge should shape your landed cost but not inflate the vendor's PO total. Leave it off.
What "Add as fee" changes — and what it doesn't
| Off (default) | On | |
|---|---|---|
| Included in landed cost at receiving | Yes | Yes |
| Counted in the PO total | No | Yes |
| Shown on PO exports / sent to the supplier | No | Yes, as an additional fee |
Either way the charge flows into inventory value at receiving — this setting is purely about the PO document and its total.
Typical uses
- On — vendor-billed tooling, setup, or labeling fees; a fuel surcharge the supplier adds to their invoice.
- Off — ocean freight paid to a forwarder; duty paid to customs; third-party inspection.
Getting this right also keeps your PO totals clean when syncing to accounting (How to Enable Purchase Order Sync to QuickBooks in Luminous).
Automating it
A cost rule that generates an extra cost line can set this too: the rule's "Add as additional fee" option makes every line it generates count toward the PO total. Combine with Auto-apply on save and a vendor's standard invoice fee lands on every matching PO with no manual work (Automatically add freight, duty, and handling charges to purchase orders).
Related questions this answers
- "Why doesn't my PO total include the freight I entered?"
- "My vendor bills a labeling fee — how do I get it on the PO they receive?"
- "Will an extra cost still hit landed cost if it isn't a fee?"