How Epicor Landed Cost Works
The process begins when a business purchases goods from a supplier. The supplier invoice establishes the purchase price, while freight providers, customs authorities, insurers, and other service providers may generate additional charges. Finance and inventory teams identify the charges eligible for capitalization and determine how those costs should be distributed across the received items.
For example, a shipment may contain several products with different quantities, weights, or purchase values. Freight might be allocated by weight, while insurance could be allocated according to item value. Once the allocation basis is defined, the business can calculate a more complete inventory cost and record the relevant financial entries according to its accounting policies.
When extending workflows around epicor, teams should establish how receiving records, supplier invoices, landed-cost adjustments, and general ledger postings are integrated. This helps preserve traceability between the physical movement of goods and the financial value recorded for inventory.
Components of Landed Cost
The charges included in landed cost depend on the shipment, contractual terms, applicable accounting standards, and company policy. Common components include:
- Purchase price: The supplier's price for the goods, adjusted for applicable purchase discounts and other relevant terms.
- Freight and transportation: Costs of moving goods from the supplier to the receiving warehouse or other intended destination.
- Customs duties and import charges: Applicable duties and nonrecoverable import charges associated with bringing goods into a country.
- Insurance: Eligible insurance expenses related to transporting the shipment.
- Handling and logistics fees: Qualifying charges for loading, unloading, port handling, or other services directly attributable to acquiring and receiving the inventory.
Businesses should distinguish eligible inventory costs from expenses that must be recognized separately under their accounting policies. Recoverable taxes, for example, are generally accounted for separately from inventory cost, subject to applicable rules and circumstances.
Landed Cost Formula and Worked Example
A practical calculation for a shipment is:
Total Landed Cost = Purchase Cost + Eligible Freight + Duties + Insurance + Other Eligible Charges
Landed Cost per Unit = Total Landed Cost ÷ Number of Units Received
Assume a company receives 500 units with a total purchase cost of $10,000. Freight is $1,200, customs duties are $800, insurance is $200, and other eligible handling charges are $300.
Total Landed Cost = $10,000 + $1,200 + $800 + $200 + $300 = $12,500
Landed Cost per Unit = $12,500 ÷ 500 = $25
The resulting landed cost is $12,500, or $25 per unit. The supplier purchase price alone would be $20 per unit, so including eligible additional charges gives the business a more complete basis for inventory valuation and pricing decisions. This example assumes all listed charges qualify for inclusion and are allocated entirely to the shipment.
ERP Integration and Financial Controls
Effective landed-cost management requires consistent information across purchasing, receiving, inventory, accounts payable, and general ledger processes. Epicor Integration Finance describes the connection between ERP operational data and finance workflows, helping organizations maintain alignment between source transactions and financial records. Relevant Epicor ERP Modules may support purchasing, inventory management, supplier invoicing, and general ledger reporting, depending on the deployed system.
Purchase requisitions, approvals, and purchase orders provide a record of expected costs and authorized spending. Understanding the Purpose of Purchase Order Process: Business Outcomes Guide can help teams strengthen procurement controls and maintain visibility into supplier commitments before goods arrive. Comparing purchase orders, receipts, invoices, and freight documentation also helps confirm that charges relate to the correct shipment.
Supplier payment timing should be reviewed separately from landed-cost capitalization. For example, payment-term checks can help identify invoice differences and unexpected cash outflows; Spotting Vendor Payment Term Deviations Before They Cost You provides context for reviewing supplier terms and payment controls.
Improving Landed-Cost Accuracy with Finance Automation
Businesses can improve consistency by defining allocation methods, maintaining complete shipment documentation, reconciling estimated and actual freight charges, and reviewing inventory valuation after cost adjustments. Allocation rules should reflect the nature of each charge: weight may suit transportation costs, while purchase value may be appropriate for certain insurance or duty allocations. Teams should also establish how later-arriving invoices affect inventory still on hand and goods already sold.
The Hyperbots Platform supports company-specific ERP integrations, workflows, roles, and general ledger structures through a no-code framework. Its Process Specific Capabilities support finance workflows tailored to specific operational requirements, while Ready to Deploy Capabilities provide pre-trained agents and ERP connectors for relevant finance tasks.
Self Learning Capabilities allow workflows to learn from human corrections and refine decisions over time. Through Human in the Loop review, finance professionals can handle exceptions, approve adjustments, and provide feedback on unusual charges or allocation outcomes. When evaluating technology-led finance transformation, Maximize Finance ROI with AI Automation Insights offers a framework for considering measurable outcomes such as improved processing consistency, stronger audit trails, and better financial visibility.
Summary
Epicor Landed Cost helps businesses account for eligible expenses beyond the supplier's purchase price when determining the cost of inventory. By allocating freight, duties, insurance, and other qualifying charges consistently, organizations can improve inventory valuation, product-cost visibility, and profitability analysis. Clear allocation policies, connected ERP records, and regular reconciliation help finance teams maintain reliable reporting and make better-informed purchasing and pricing decisions.