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Author's profile photo Katrin Gruber

Landed Costs in SAP Business ByDesign – Landed Costs for materials with perpetual method Standard

This blog post is part of a series of related blog posts highlighting the enhancements to address the handling of landed costs.

Link to main blog post.



The objective of this blog post is to explain how the new functionality works for materials with perpetual method standard. I will refer to the same business process example as used in the blog Inbound Process. The emphasis is to highlight the differences in financials compared to the moving average perpetual cost method.

Note: The process steps of how to handle landed costs do not change:

  • Plan landed costs in the purchase order
  • Post the goods receipts
  • Post the landed cost invoice
  • Allocate the landed cost invoice items to the goods receipts
  • Set the landed cost clearing sets to “To be Cleared”
  • Execute the landed cost clearing run

If the material has a perpetual cost method standard, and the landed costs need to be capitalized, the inventory costs as defined in the material master data must include both the material costs and the landed costs. Certain reports in SAP ByDesign can help you to calculate the unit costs, for example, Landed Cost – Line Items.


A) Process variant: Landed costs to be capitalized

1.  Planned landed costs in purchase order

The process variant will be based on the following initial situation:

Material Cost/Unit Ordered Quantity Planned Landed Costs
LC002 100 USD 10 ea 100 USD
LC004 200 USD 20 ea 400 USD


2. Post goods receipt and inventory valuation

The goods receipt is handled in the same way as any other goods receipt, independent of landed costs. The material unit costs are not impacted by the goods receipt.

In financials, the planned landed costs will be posted on the credit side of the clearing account for Unbilled Payables related to the affected landed cost category (Freight in this example). In contrast to the moving average valuated material, the offset posting affects the difference account, maintained for differences from purchasing. This is the significant difference between the process variant with materials moving average valuated compared to a standard cost valuated material.


3. Supplier invoice for landed costs

This process step is identical to the one described in point (3) of the blog Inbound Process.

4. Allocation of the landed cost invoice items to the inbound delivery items

This process step is identical to the one described in point (4) of the inbound process blog.

5. Financial clearing and inventory update

This process step is identical to the one described in point (5) of the inbound process blog.

If the allocated landed costs cause landed cost clearing variances, they will not be cleared against the material ledger (thus not changing the material unit costs), but will be cleared against the same purchase price difference account as shown at goods receipt posting.


B) Process variant: Landed costs to be handled as expenses

In this case, in all postings where for moving average valuated materials the Difference from Purchasing account is posted, the Expense account is posted instead. This expense account must be assigned in the configuration to the corresponding landed cost category. The details regarding this configuration setting are explained in the prerequisites blog post.


Back to main blog post.

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