Chart of Accounts Setup for Landed Cost Expenses and Freight Charges

ERPNext
1

Hi ERPNext Community,

I am configuring my Chart of Accounts (with numbering) in ERPNext and need some guidance on how to record various expenses that adjust the cost of items in Landed Cost Vouchers. Here are my questions:

  1. Expense Classification:
  • Should expenses such as freight charges, bank TT charges, customs duty charges, and VAT expense be recorded as direct expenses or indirect expenses?
  • If these are direct expenses, should they be included under “Stock Expenses”?
  1. Current Account Structure:
    My current account structure under 5000 - Expenses is as follows:
  • 5100 Direct Expenses
    • 5110 Stock Expenses, which includes:
      • 5111 Cost of Goods Sold
      • 5112 Expenses Included In Asset Valuation
      • 5118 Expenses Included In Valuation
      • 5119 Stock AdjustmentShould I record the landed cost expenses directly under 5110 Stock Expenses, or would it be more appropriate to create a sub-account (e.g., under “Expenses Included In Valuation”) for these costs?

  1. Parent Account for Expense Charges:
    What should be the parent account and the appropriate account type for these expense charges when they are added to the Landed Cost Voucher?

  2. Freight Charges Account:
    Is it sufficient to use a single account named “Freight, Forwarding & Clearing Charges - Import” for freight-related expenses, or should I create multiple sub-accounts for individual charges (such as Transportation Charge, Fuel Surcharge, Customs Duty, Disbursement Fee, Processing Fee, Other Government Agency Fee, Prepayment Fee, VAT Expense on Import, Round Off, Purchase Discount, BOE Registration Fee, Knowledge and Innovation Fee, DHL Admin Fee, etc.)?

  3. Landed Cost Voucher Expense Account Selection:
    In the Landed Cost Voucher, should I select individual expense accounts for freight charges, customs duty, bank TT charges, etc., or should I use a consolidated account (like 5118 - Expenses Included In Valuation) and then detail the individual charges in the description?

  4. VAT Accounts:
    Are my VAT accounts set up correctly in the Chart of Accounts as follows?

  • 1500 - Other Current Assets > 1510 - VAT Receivable
  • 2300 - Other Current Liabilities > 2310 - VAT Payable
  1. Purchase & Freight Discounts:
    Under 4200 - Indirect Income, I currently have an account 4210 - Purchase & Freight Discounts Received. Is this setup appropriate?

8. Expense Account Setup for Landed Cost Expenses:

  • Details Required:

    • Parent Account
    • Appropriate Account Name
    • Appropriate Account Number
    • Is Group: (Tick if it’s a group account, untick if not)
    • Account Type: This setting can be used to filter in various transactions
    • Currency:

  • Question:
    Should these expense accounts (e.g., freight charges, customs duty, bank TT charges, VAT expense) be recorded under the “Expenses Included In Valuation” parent account? And in the Landed Cost Voucher, should we select these specific expense accounts, or use the consolidated “Expenses Included In Valuation” account for all such charges?

Please advise on the recommended configuration.

I would appreciate any guidance on structuring these accounts to ensure accurate landed cost calculations and smooth processing in ERPNext.

Thank you in advance for your support!

2

Hi Everyone, I’m just following up on my previous discussion about setting up Chart of Accounts for Landed Cost Expenses and Freight Charges.

I’d really appreciate any feedback or insights.

Thank you!