Allocate freight, customs and insurance into true unit cost
Sighthem's landed cost software allocates loading charges inside the foreign trade flow, not in a separate spreadsheet. You open a charge document tied to the purchase order, enter freight, customs, insurance and other items, and allocate them by value or by quantity. When the document is approved, the lines' unit inventory cost is updated with weighted-average; buying FOB and selling CIF, you see the margin on the real landed cost, with no later surprise.
The charge document: a single record tied to the purchase order
Landed cost is about allocating charges into the inventory cost; the allocation is only correct when the charges are gathered in one place. Sighthem ties the charge document to the purchase order and keeps freight, customs, insurance and other items on the same record.
- Tie the charge document to the related purchase order (PO), seeing on one record which import batch carries which charges, without hunting for the lines to allocate elsewhere
- Enter freight, customs, insurance and other charge items as separate lines, separating the amount and type of each charge on the document
- Bring the product lines from the order onto the document, clarifying from the start which lines' unit cost the charge will be allocated to
- Add each charge to the document as the invoice arrives, recording freight and customs amounts from the real document rather than an estimate
Allocation key: by value or by quantity
The same charge affects the lines' unit cost differently depending on which key it is allocated by. Sighthem offers two allocation keys; you pick the one that fits the nature of the charge.
- With allocation by line amount (value), split the charge in proportion to the lines' order amount; let an expensive line carry a larger share of the charge
- With allocation by quantity, split the charge in proportion to the line quantities; get the right ratio for weight or unit based freight
- Separate freight, customs and insurance with the key that fits each charge, instead of splitting everything with one blunt ratio
- See it on the document before you approve the allocation, checking how much charge falls on each line before the calculation is closed
Weighted-average: unit cost updates on approval
The allocation calculation is only useful once it is posted to the inventory cost. Sighthem updates the lines' unit inventory cost with the weighted-average method when the charge document is approved.
- When you approve the document, let the allocated charge post to the lines' unit inventory cost with weighted-average, so you never adjust the cost by hand
- Merge the existing stock cost with the newly arrived charge batch through weighted-average, so the unit cost reflects both the goods cost and the loading charge
- Take the approval step after reviewing the allocation, so you do not trigger a cost update on the wrong document
- After approval let the line's unit cost come to include the charge, freeing you from tracking goods cost and loading charge separately
Real margin: no surprise when you buy FOB and sell CIF
When you buy FOB, take on freight and insurance and then sell, mistaking the goods cost for the total cost misleads the margin. Because Sighthem folds the loading charge into the cost, margin reports are calculated on the real landed cost.
- See the true unit cost by adding freight, customs and insurance to the goods cost, rather than calculating margin on the bare invoice amount and getting it wrong
- Reflect the shipping and insurance you take on in a FOB-to-CIF sale into the cost, and build the selling price on the real landed cost
- Report product and order margin on the landed cost, so you do not discover later that a job you thought was profitable eroded into charges
- Because the cost sits in one source, feed quotes, sales and margin analysis from the same real figure
Scope and currency: v1 works within clear limits
A cost tool earns trust as much from clearly stating what it does not do as what it does. Sighthem landed cost v1 is defined within specific limits, and the allocation stays consistent inside those limits.
- Build the allocation on a purchase order (PO) basis, splitting the charge to the lines of the related import batch within this scope
- Keep the charge line and the product line in the same currency, so the allocation is calculated on that single currency
- A charge line in a different currency does not enter the allocation and is skipped; bring the amount into the common currency first and add it to the document, keeping currency conversion out of the allocation
- Allocation is forward-only; it updates the cost after approval and does not rewrite past records backwards
End-to-end flow: unbroken from import to inventory cost
Landed cost is not a spreadsheet on its own; it lives in the same flow as import, inventory and sales margin. Sighthem places the charge allocation inside this chain, gathering fragmented cost tracking onto one platform.
- Start from the import order and tie the charge document to the same order, writing the input cost into the operation rather than a separate spreadsheet
- Post the allocated cost to the stock line, so the unit value of the goods in your warehouse includes the loading charge
- Share the same product record with the COMMERCIAL INVOICE and shipment screen on the export side, so cost and sales flow from one card
- Gather purchasing, inventory and margin reporting on one platform, without carrying cost data between modules by hand
Access, traceability and mobile: the right cost, with the right person
Purchasing, warehouse and accounting use cost data in different scopes; not everyone needs to approve the charge document. Sighthem opens the right data to the right person with role-based access and lot traceability.
- Separate the rights to enter and to approve a charge document with stackable permission presets, controlling who changes the unit cost
- Record which imported batch entered stock at which cost with lot and shelf-life traceability, proving the cost chain at audit
- Keep the imported batch separate per warehouse with a multi-warehouse model, without mixing the cost of the same product across warehouses
- See the unit cost and the charge document from the field with the mobile PWA, while preserving tenant isolation within a single workspace
Choose the allocation key by the nature of the charge. Allocate weight or volume based freight by quantity, and value driven charges like insurance by line amount; splitting everything with one blunt ratio makes an expensive or a heavy line look different from what it is. Check how much falls on each line on the document before you approve.
When you fold the loading charge into the goods cost, margin reports show the real cost. A business that mistakes the FOB invoice amount for cost and prices on it does not find the profit it expected once freight and customs erode it; allocating the charge from the start lets you base quotes and sales decisions on the true landed unit cost.
Allocation is forward-only and updates the cost at the moment of approval; it does not rewrite history. Also, a charge line in a currency different from the product line does not enter the allocation and is skipped. Bring the charge into the common currency first and approve the document in the right order, otherwise some lines stay without their share of the charge.
Frequently Asked Questions
Which document do I run the landed cost allocation on?
You tie the charge document to the related purchase order (PO) and enter freight, customs, insurance and other charge items as separate lines. You select which key to allocate the lines by, and when you approve, the charge is posted to the unit inventory cost. So the allocation runs on a single PO-linked charge document; you do not keep a separate spreadsheet.
Should I pick value or quantity as the allocation key?
Both are available; you choose by the nature of the charge. Allocating value driven charges like insurance by line amount (value) and weight or unit based freight by quantity gives a more accurate ratio. Before approving, you see on the document how much falls on each line, and you can change the key and review again if needed.
How does the unit cost change after approval?
When the document is approved, the allocated charge is posted to the lines' unit inventory cost with the weighted-average method. The existing stock cost and the newly arrived charge batch merge, and the unit cost comes to include both the goods cost and the loading charge. This way margin reports use the real landed cost rather than the bare invoice amount.
What happens if the charge line and the product line are in different currencies?
In the v1 scope the charge line and the product line must be in the same currency; the allocation is calculated on that single currency. A charge line in a different currency does not enter the allocation and is skipped. To include such a line, you first bring the amount into the common currency and then add it to the document; currency conversion does not mix into the allocation.
Does it correct the costs I recorded in the past retroactively?
No. Allocation is forward-only; it updates the unit cost after approval and does not rewrite past records backwards. That is why it matters to open and approve the charge document for the relevant import batch in time. You can try Sighthem free for 14 days on the PRO plan and test cost allocation on a real import batch.
Allocate freight, customs and insurance with a PO-linked charge document and update the unit inventory cost with the real landed cost. Try Sighthem free for 14 days on the PRO plan, no card required.
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