Skip to Content
Technical Articles
Author's profile photo Resham Perween

Landed Cost Invoice and payment in SAP Business One

This blog post is all about Landed Cost – which occurs during import of the goods. As I was doing the hands-on I came across this simple step to create the Invoice and payment for landed Cost and thought it would be helpful for the end-user to learn the simple step of creating a landed cost document.

First, Let’s not get confused with the Vendor invoice (Supplier of the item) with the Landed cost Document (Broker Invoice).

Landed Costs are additional expenses that may apply during the import of goods. SAP Business One lets you track customs, broker, and insurance fees, creating a landed costs document. The landed cost document updates the cost of the inventory items with the additional expenses incurred in purchase. It has nothing to do with the A/P Invoice of the Vendor.

Landed cost could be a separate invoice which we get from the 3rd party (Broker) who will be taking care of the services involve like Shipping, Storage, Handling, and custom, etc.

We will be creating a separate A/P Invoice for the Vendor and the Broker.

Step 1: Create B.P Master data for Vendor and Broker.

Step 2: Create a goods receipt PO (or multiple goods receipts POs) for the order of the items.

Step 3: Create Landed Cost Document

Go to > Purchasing > Landed Cost. 

Search for the vendors of the original items. Choose Copy From Goods Receipt PO. Select the goods receipt PO for which items need landed costs added.

Then Enter costs into the Costs Tab. Click on the Shipping Row and Enter the cost in the Amount field.  By choosing allocation by quantity, you decide how you want to allocate the shipping costs across items.

You can add new landed cost categories that allocate in different ways by choosing the New Landed Costs button.  Add your code and name and allocation by (there are multiple choices on how to allocate) and select OK.

Go to Administration > Setup > Purchasing > Landed Cost to define the landed cost’s allocation account.

Go to Administration > Setup > Inventory > Customs Groups to define the customs allocation and expense accounts.

When you are done, choose Add to add the document.

Step 3: Create an A/P Invoice for the Vendor. (Click on the Copy From option, Select GRPO and Choose the concerned document. Click on Add to add the document.

Step 4: Create a Separate A/P Invoice for the Broker. (Click on the Copy From option, Select Landed Cost, and Choose the concerned document. Click on Add to add the document.

Step 5: Go to Banking > Outgoing Payments to make the payment.


Follow the above simple step to create an Invoice for Landed Cost.

You can also find Landed cost related Q/A and post your questions in the community if you have any:

Hope this helps!

Resham Perween

Assigned Tags

      You must be Logged on to comment or reply to a post.
      Author's profile photo Md Zeeshan Ali
      Md Zeeshan Ali

      Very Informative, Thank You!

      Author's profile photo Irfan Ahmad
      Irfan Ahmad

      Thanks for sharing an elaborated article which has cleared so many of my confusion.

      Author's profile photo Ali Hussain
      Ali Hussain

      Create Project Code

      enter all import concerning transaction in Stock in Trade (Stock in Transit like SIT Custom Duty SIT Excise SIT Freight) with project code and make all payment entries through outgoing payments

      10101 STOCK IN TRADE    
        1010101 STOCK IN TRADE  
          101010101 STOCK IN TRADE
        1010102 INVENTORY  
          101010201 RAW MATERIAL
          101010202 PACKING MATERIAL
          101010203 FINISHED GOODS
        1010103 WORK IN PROCESS  
          101010301 WORK IN PROCESS
          101010302 SEMI FINISHED GOODS
        1010104 STOCK IN TRANSIT  
          101010401 SIT CUSTOM DUTY
          101010402 SIT EXCISE

      after that open Landed cost and call project code and copied all items from GRN after the landed cost document updates the cost of the inventory items with the additional expenses incurred in inventory and you can easily traced inventory updated value in inventory audit report. .

      Ali Hussain 

      Author's profile photo Nishad TA
      Nishad TA


      Informative, but one doubt, why should we create BP for Broker, we can do outgoing payment by selecting "Account" by selecting the "Purchase clearing Account" which we assign to the landed cost setup.. right?



      Author's profile photo Kevin Devlin
      Kevin Devlin



      Do the items need to remain in the original receipt location until the landed costs are applied or can the be moved (goods issue to production order / warehouse transfer etc)? and the landed costs be applied without problems?

      Author's profile photo Pradnya S
      Pradnya S


      Yes, items are needed to remain in the location so that system can load the additional expenses on stock in respective warehouse. in the absensce of no stock or less stock the postings are done on other GLs such as price difference, stock increase / decrease or negative inventory as the case may be.