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Put simply, landed costs are the total cost of your stock purchases after you take into account shipping, duties, handling costs and similar shipping fees. Basically, you can think of it as the cost of your stock plus the cost it takes to get it to you.
It’s important to track your landed cost to get a real idea of how much your stock is costing you. It’s especially important if you deal with heavy or bulky materials, or buy supplies internationally – where shipping and handling costs can be astronomical!
If you are looking to manage and understand your landed costs, WorkGuru has features purpose-built to help you do just that. Here are the top four ways that WorkGuru can help you manage your landed costs when receiving new stock.
WorkGuru’s stock control is a perpetual inventory, working on the first-in, first-out (FIFO) principle.
That means that WorkGuru tracks the actual cost of your products on each purchase order. So, if your costs change dramatically due to seasonal availability, or the location of your suppliers being local or international the actual cost is always taken into account.
It’s much more accurate than the average cost model and allows WorkGuru to track landed costs and the cost of goods sold (COGS) more accurately.
Not all your suppliers will bill in the same way. Likewise, you may need to pay a different supplier (or suppliers) for the shipment and handling of your stock. Regardless, WorkGuru still lets you add those costs to your stock.
You are able to assign costs from one purchase order to the stock on another purchase order easily to make sure that your landed costs for those stock items are accurate. Even when the costs have been paid to more than one supplier, or over a number of invoices, it’s super easy to assign costs to the right stock.
Alternatively, landed costs can also be added straight to the purchase order to quickly and easily add to your total costs. Plus, you can always double-check that these have been applied correctly and see what the costs are.
You can take a look at the step-by-step ways that you manage this. Our support website has a detailed overview of how WorkGuru helps you manage to receive stock and adding landing costs. Click here to read more.
WorkGuru allows you to raise purchase orders in currencies other than your default. This allows you to accurately track your landed costs regardless of how or where you pay. It’s super important when you are making purchases internationally, where the exchange rate can hugely change your actual cost.
WorkGuru converts the foreign currency back to your default currency when receipting the order, using the current exchange rate from the European Central Bank by default. You can also override the rate with your own if needed.
When you receive the PO, you can update the exchange rate again, which will lock in the landed cost on your PO, and create the stock journal in your default currency, at your specified exchange rate.
By keeping track of your accurate landed costs you can better manage your costs and project margins better. WorkGuru distributes your landed costs across the line items on your purchase order, based on the dollar value of each line item.
By doing this, you can take into account the total cost of your stock when you quote your customers to help you stay profitable. It’s especially important when you have bulky items that are expensive to ship. If you didn’t take these costs into account, you might lose money on selling that item and not even know. WorkGuru makes it effortless by doing the heavy lifting for you.
WorkGuru can help you manage your stock, projects and much more all in one place. With loads of powerful features, including par levels, production jobs, and FIFO stock tracking, you can improve the way you manage your inventory.
If you want to see the tools (and many more) in action, you can reach out for a free demo. Get in touch to book a time for a personalised training session.