NetSuite Landed Cost Overview

Why Landed Cost in NetSuite Matters

Accurately calculating landed costs provides a comprehensive view of a product’s total expenditure. This understanding is fundamental for businesses to:

Set Realistic Pricing

In the competitive marketplace, accurate pricing is not just a factor of profit margins but also market positioning. Without a comprehensive understanding of the total cost including purchase price, shipping, duties, and taxes businesses risk underpricing, which erodes profits, or overpricing, which can diminish market share.

Maintain Profitability

Proper allocation of landed costs ensures that all expenses are accounted for. This level of precision safeguards against the erosion of profits through unaccounted costs, ensuring financial health and sustainability.

Make Informed Decisions

The ability to view the full cost spectrum of products empowers decision-makers. Whether it's choosing between suppliers, deciding on shipping methods, or managing inventory levels, accurate cost data provides a foundation for strategic decision-making.

NetSuite’s functionality, particularly in instances with Advanced Receiving enabled, automates the inventory costing process at the item receipt level. NetSuite offers multiple approaches:

Manual Allocation

Users can manually attribute landed costs per category or source them from vendor bills.

Automated Templates

NetSuite allows using estimated landed cost templates for automation.

Limitations

A notable limitation is that a vendor bill can only be allocated to one item receipt.

Use-Case: Enhancing Reporting with NetSuite’s Landed Cost

Challenge

Despite NetSuite’s robust features, challenges can arise, especially for companies dealing with needing to report on high volumes of item receipts or those requiring precise cost allocation methods. Manual methods can be time-consuming and prone to errors, while estimated costing might not suffice for businesses operating on smaller margins.

Solution

NetSuite's Landed Cost feature allows for the customization of the inventory valuation report to display the Lot/Serial Numbers field. When landed costs are applied, they appear on the report with the same transaction ID, the landed cost category name in the description, and a zero quantity.

Benefits

• Efficiency in Operations

  The automation of landed cost allocation within NetSuite significantly streamlines operational processes, marking a departure from traditional, manual methods that are often time-consuming and error-prone.

• Precise Costing

  NetSuite Landed Cost solution enhances the accuracy of inventory cost management by allocating expenses directly related to the procurement and transportation of goods in a precise manner.

• Scalability

  One of the standout features of NetSuite Landed Cost functionality is its scalability. As businesses grow and transaction volumes increase, the need for a robust system that can handle this growth without a drop in performance becomes paramount.

• Industry Adaptability

  Whether it's wholesale distribution, manufacturing, retail, or any other sector that deals with the importation and distribution of goods, NetSuite Landed Cost functionality can be tailored to meet the unique needs and challenges of each industry.

Dealing with tariff restrictions? See How NetSuite’s Landed Costs Can Help

Looking for other solutions?

As an award-winning NetSuite Alliance and Solution Partner, GURUS has been offering custom solutions to NetSuite users across North America. If you’re interested in learning more about our selection of custom solutions, visit our customizations page. Or, fill out the form below and speak to a solution specialist.

Why Choose GURUS to Implement Landed Cost in NetSuite

Understanding and managing landed costs is a key element in maintaining a competitive edge in today's market. GURUS Solutions enhances NetSuite’s capabilities, providing a tailored, efficient, and precise method for landed cost allocation.

Whether your business is struggling with pricing strategies, looking to maintain profitability, or seeking to improve inventory costing visibility, our custom solution offers significant advantages.

Don’t let complex inventory costing hinder your business’s potential. Contact GURUS Solutions to start toward a streamlined, efficient, and accurate inventory management through landed costs with Oracle NetSuite.