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How to use Landed Cost to increase the cost of inventory from an allocated tariff

In Acctivate, the Landed Cost feature allows users to allocate additional costs—such as tariffs, shipping, or handling fees—to inventory received on a Purchase Order (PO). This ensures that the inventory cost recorded in Acctivate (and synchronized with QuickBooks) includes these expenses, rather than just the base cost from the supplier. This guide focuses specifically on adding tariff-related costs to inventory. This process assumes you have already created a Purchase Order for the inventory items and have permissions to manage POs and landed costs in Acctivate.

Step 1: Add the Tariff as a Landed Cost

Apply the tariff to increase the inventory cost:
    • From the Inventory menu on the toolbar, click the Enter Landed Costs button.  This opens the Landed Cost Entry window.
  2. Enter Tariff Details:
    • In the Landed Cost Entry window, click [New] to create a new Landed Cost session.
    • Amount: Enter the total tariff cost (e.g., $500.00) as provided by your customs broker or shipping documentation.
    • Vendor (Optional): If the tariff was paid to a separate entity (e.g., a customs agent), select that vendor. Otherwise, leave it as the PO vendor.
    • If you plan to create a vendor bill, you'll need to enter in an Invoice number, Invoice Date as well.
  3. Distribute the Tariff Cost:
    • Choose how to allocate the tariff across the received items:
      • By Quantity: Divides the tariff cost proportionally based on the number of units received.
      • By Cost: Allocates the tariff based on the base cost of each item.
      • By Weight or Volume (if enabled): Uses item weight/volume data (requires additional setup).
    • Click Distribute to preview the allocation, then adjust manually if needed.
  1. Save the Landed Cost:
    • Click Save to apply the tariff to the received inventory. Acctivate will update the Average Cost or Standard Cost (depending on your costing method) for each item to include the tariff.

Step 5: Verify and Sync with QuickBooks

After applying the landed cost, ensure the updated inventory cost is reflected correctly:
  1. Check Inventory Cost:
    • Go to Products → Open the affected product → Costing tab.
    • Verify that the tariff has increased the item’s cost (e.g., from $10/unit to $12/unit).
  2. Sync with QuickBooks:
    • When the PO is fully processed (e.g., invoiced by the vendor), Acctivate syncs the updated costs to QuickBooks.
    • The tariff cost posts to the inventory asset account, and any vendor invoice for the tariff (if separate) posts to the appropriate expense or liability account.

Additional Tips

  • Multiple Tariffs: If you have multiple tariffs (e.g., different rates for different items), add them as separate landed cost lines in the same PO.
  • Prepaid Tariffs: If the tariff was paid before receiving the goods, record it as a prepaid expense in QuickBooks, then reference it when entering the landed cost in Acctivate.
  • Reporting: Use Acctivate’s Inventory Valuation or Purchase Analysis reports to track how tariffs impact your inventory costs over time.

Troubleshooting

  • Landed Cost Button Missing: Ensure the feature is enabled in Configuration Management and that the PO has been received.
  • Cost Not Updating: Confirm that the landed cost was saved and distributed correctly. Check the product’s Costing tab for updates.
  • QuickBooks Sync Errors: Verify that the General Ledger accounts for inventory and landed costs are correctly mapped (File → Configuration Management → Accounting → Accounts).
For additional support, contact Acctivate Support or consult the Acctivate Documentation for more details on Landed Cost setup and usage.
This knowledge base article empowers Acctivate users to accurately incorporate tariffs into their inventory costs using the Landed Cost feature, ensuring precise financial tracking and reporting.