How Do Epicor Landed Cost Invoices Work?
The process connects purchasing, receiving, supplier invoicing, and inventory valuation. A business first receives goods against a purchase order, then identifies additional charges associated with bringing those goods into inventory. Supporting invoices and allocation rules establish how each cost should be assigned to the received goods.
- Identify the receipt: Link the goods to the appropriate purchase order, receipt, supplier, and inventory items.
- Capture additional charges: Record freight, duty, insurance, brokerage, and other eligible costs from the relevant invoices.
- Validate supporting documents: Compare billed amounts with supplier invoices, freight agreements, customs documentation, and receipt details.
- Allocate costs: Distribute qualifying charges across inventory items using an appropriate basis, such as quantity, weight, value, or volume.
- Post accounting entries: Apply the configured accounting treatment to inventory valuation, accrued liabilities, and supplier balances.
Exact screens and transaction steps vary by Epicor product version and company configuration. The essential control is to maintain a traceable relationship between each additional charge and the inventory or receipt it supports.
How Are Landed Costs Calculated and Allocated?
Landed cost per unit can be calculated by adding the purchase cost and eligible additional acquisition costs, then dividing the total by the number of units received.
Formula: Landed cost per unit = (Purchase cost + Allocated additional costs) ÷ Units received.
For example, a company purchases 500 units for $10,000 and incurs $1,500 in eligible freight and customs charges. If the full $1,500 qualifies for capitalization, the total landed cost is $11,500. The landed cost per unit is $11,500 ÷ 500 = $23.
When a shipment contains different products, the business needs a consistent allocation basis. Allocating by purchase value may suit goods whose additional costs are value-related, while weight or volume may better reflect freight charges. The chosen method should follow company policy and be applied consistently to comparable transactions.
How Do Landed Cost Invoices Affect Inventory and Financial Reporting?
Correct landed cost accounting improves the relationship between inventory valuation, cost of goods sold, and gross profit. When eligible costs are included in inventory value, they generally flow into cost of goods sold as the related inventory is sold. Charges that do not qualify for capitalization are recorded according to the relevant accounting policy.
For example, if the $23-per-unit inventory in the earlier example is sold, its allocated acquisition cost provides a more complete basis for calculating the cost of goods sold. If only the $20 purchase price were considered, the business would omit $3 per unit of qualifying additional cost from its inventory cost calculation.
The Landed Cost concept helps explain why the purchase price alone may not represent the full cost of acquiring inventory. Within Epicor ERP, purchasing, inventory, and accounts payable processes can provide the transaction context needed to connect additional charges with financial records. Epicor Integration Finance describes the wider role of connecting ERP transaction data with accounting workflows and reporting.
What Controls Improve Invoice Accuracy?
Effective controls establish that every landed cost charge is supported, allocated appropriately, and recorded only once. Teams should reconcile supplier invoices to receipts, check that the charge relates to the correct shipment, and review allocation totals before posting. They should also distinguish charges already included in the supplier's purchase price from separately invoiced costs.
Payment terms and due dates should be checked before supplier invoices are approved, so that payment timing reflects the contractual agreement. The guidance in Spotting Vendor Payment Term Deviations Before They Cost You illustrates why comparing invoice terms with agreed terms supports payment control and cash management.
Invoice capture, extraction, matching, validation, and general ledger coding can be supported by AI-enabled workflows. How XR Extreme Reach Automates 80% of Invoices provides an example of invoice automation in practice. For finance technology planning, Maximize Finance ROI with AI Automation Insights discusses ways to evaluate automation outcomes against measurable business objectives.
How Can Epicor Workflows Support Landed Cost Processing?
Businesses can align landed cost processing with their epicor ERP workflows by defining the relevant transaction references, allocation rules, approval roles, and accounting mappings. The Hyperbots Platform supports company-specific ERP integrations, workflows, roles, and general ledger structures through configurable settings. Its Process Specific Capabilities support finance tasks designed around particular business processes, while Ready to Deploy Capabilities include pre-trained agents and ERP connectors for finance workflows.
Self Learning Capabilities allow workflows to improve using human feedback, including refinements to coding and processing decisions. Human in the Loop review gives authorized finance staff a role in assessing exceptions and approving decisions that require judgment. Finance leaders can evaluate such technology-led changes through measures such as invoice processing time, allocation accuracy, posting accuracy, and the percentage of invoices processed without manual intervention.
Summary
Epicor Landed Cost Invoices help businesses capture and allocate additional acquisition costs associated with purchased inventory. By linking charges to receipts, applying consistent allocation methods, validating supplier documentation, and using the correct accounting treatment, finance teams can improve inventory valuation, cost visibility, supplier payment controls, and financial reporting.