Who this is for

Purchasing and finance teams who want to understand where a cost should be entered — on the purchase order, the shipment, or the receiving report — and what actually affects inventory value.

The short answer

Enter costs as early as you know them. They flow forward automatically, and only affect your inventory value once goods are received.

  • On the PO — costs here are estimates. They carry forward to shipments created from the PO, and give you a realistic expected landed cost from day one.
  • On the shipment — this is where real-world charges usually land (the actual freight invoice, duty assessment). These are the numbers that will be used at receiving.
  • On the receiving report — for charges specific to one receipt, like a local handling fee for that delivery.

Typical workflow

  1. Create the PO. Add expected charges in the Extra Costs section (or let cost rules add them). Example: 8% estimated ocean freight.
  2. Create the shipment from the PO. The PO's extra costs carry over automatically. When the real freight invoice arrives, update the amount on the shipment.
  3. Receive the goods. The system spreads the shipment's costs across the received items (by units, value, weight, or volume — whichever you chose on each cost line) and folds them into each item's landed cost.

Partial receipts are handled for you

If one shipment arrives across several receipts, you do not need to split the freight yourself. The total cost on the shipment is divided proportionally across receipts. For example, a $500 duty on a shipment where you receive 20% of the value in the first delivery puts $100 of duty on that receipt and $400 on the rest.

Targeting costs at specific items

Any extra cost line can be filtered to specific items using categories, tags, internal SKUs, supplier SKUs, or PO numbers. A duty that only applies to one product category can be filtered to that category — items outside it receive none of that charge.

Things to watch

  • Update costs before receiving when possible. If you change a shipment's costs after some receipts are already reconciled, those receipts are not recalculated automatically.
  • Items already sold keep their original cost. Correcting an old receiving report updates remaining stock, but past sales keep the cost recorded at the time of sale.
  • "Do PO extra costs affect my inventory value?"
  • "Where do I put the freight invoice amount?"
  • "What happens to freight when a shipment arrives in two deliveries?"
  • "How do I make a duty charge apply to only some products?"