If you record only the invoice price and ignore freight and customs, your inventory valuation will be understated and your profit margins will be overstated. For imported goods, customs duty alone can add 20% to 30% to the cost. For domestic purchases with significant freight charges, the landed cost per unit can be substantially higher than the purchase price. Accurate landed cost tracking in Zoho Books ensures your cost of goods sold figure on the P&L reflects the true cost of inventory sold.
Open the relevant purchase order or bill in Zoho Books. Click Add Landed Cost. Select or create a cost type (Freight, Customs Duty, Insurance, Handling Charges). Enter the total amount for that cost type. Choose the allocation method: by quantity (each unit absorbs an equal share), by value (each item absorbs a proportional share based on its value), or by weight (requires weight data on items). Zoho Books calculates the allocated cost per line item and adds it to the inventory value of each item received.
Customs duty paid on imported goods is not subject to GST (it is a customs levy, not a GST levy), so the customs duty amount is a pure cost to add to the inventory value. IGST on imports is paid as an import duty and is separately claimable as ITC under GST. Zoho Books handles IGST on imports through the “Import of Goods” tax treatment, recording the IGST as ITC while adding customs duty as a landed cost to the inventory value.
Landed cost in Zoho Books is the total cost of acquiring inventory including purchase price plus freight, customs, insurance, and handling fees. Zoho Books lets you allocate these additional costs across items to reflect the true per-unit cost.
Open a purchase order or bill and click Add Landed Cost. Enter the cost type, amount, and allocation method. Zoho Books distributes the cost across line items proportionally and updates inventory cost accordingly.
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