Stuck with creating Landed Cost Voucher

Here’s the situation:

  1. I need to purchase 1000 bags of Cement from Manufacturer/Company (ABC Cements Ltd.). Let’s assume ex-factory rate is 500/bag for cement. ~ Rs. 500,000 total.
  2. Lets assume transportation is handled by another company XYZ Transportations Pvt. Ltd. @ 100/bag. ~ Rs. 100,000 total.
  3. Assume I need to pay Rs. 10/bag for unloading cement at my warehouse. Paid to individual labor. ~ Rs. 10,000. total
    My valuation should be 610/bag.

My work flow:

  1. I create a PO fill in item code/name, quantity and rate.
  2. I fill in Purchase Taxes and Charges table as follows:
  3. I submit the PO.
  4. I receive the goods and create and submit a Purchase Receipt.
  5. I create Purchase Invoice. of Rs. 500,000 payable to ABC Cements Ltd.
  6. I can easily create a Payment against the Purchase Invoice for amount 500,000 to ABC Cements.
  7. I create LCV against Purchase Receipt.

Below (in LCV), there is a field Applicable Charges which is empty.

My understanding is, this field must be automatically fetched from Purchase Order/Invoice/receipt. But it is not.
Question 1: Should I manually enter transportation costs and unloading charges again ?
Question 2: Where and how do I make payment entry for transportation and unloading charges ? Do I have to create a new purchase invoice manually for payment to XYZ Transportation Pvt. Ltd. ? But then, I’d have to create an ITEM called “Freight Cost” as service item which seems quite not right to do. Also, for labor costs I’d have to create an item called “Unloading Charges” as service.

Please suggest.


As you already added charges at the time of PO, you don’t need to book LCV. At the time of reception Your Inventory will be be debited with Rs.610/Bag and Goods received but Invoice not received a account Credited with RS.510/ Bag. Same time Rs. 110/Bag will be credited in Valuation Included Cost Account. When you receive actual bill of Transportation and Labour you need to book normal service Invoice debiting the Valuation Included in the Cost Account.

LCV will be useful at the time when transportation and unloading charges are not known at the time of placing PO. In this case you can book the Landed Cost Voucher after reception based on actual charge or provisional charge to value your inventory at correct rate.

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This is interesting, I didn’t know this. I’m curious to test this out. Currently, we are adding all the expenses in manually to LCV.

That’s great if it works this way. I will check.

How is it 510 and not 500 ?

I will receive transportation bill at the time of delivery. I will not receive any bill for labor charge.
How do I create a invoice for transportation ? How to I make such entry for transportation and labor ?
Is it like this ?

and create a normal purchase invoice with these items ?

Yes, you are correct it will be 500.

Yes, by selecting respective cost included in valuation as a expense account.

Hmm. that’s interesting. But I was hoping there was some proper way. It feels this is not the right way to handle this. What do you think ?

It would be better if we were allowed to create another Purchase Invoice from the same PO and pull the expenses and record it as a new entry against XYZ Transportations. Also, I will now have to create a new vendor/supplier for each labor who does the unloading works. Imagine the trouble if I have multiple consignments in a day and 10 - 20 labors to track/pay and book the expense in separate accounts.

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If you don’t want to book the supplier Invoice you can pass the journals also like Debit expenses included in valuation and Credit your Cash account. In this ways you can easily handle the cash payments to labours and solve the accounting issue also.

Okay I will talk with my accounting team regarding this. Thank you!

This option seems ideal to me this. Simplifies the workflow.