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Part 2 of a 2-Part Series on Landed Cost – Read Part 1 Here
Now that you understand what landed cost is and why it matters, it’s time to take the next step. In Part 2, we’ll show you how to know if your landed cost strategy is working, and how Microsoft D365 helps you get there.
How to Know You’re Succeeding
You’ll know your landed cost management is working well when you see these improvements:
- More Accurate Total Cost of Ownership (TCO): You’ll have a much better idea of the true, full cost of owning your products.
- Improved Pricing Decisions: You’ll be able to set prices that are more accurate and profitable because you know the real cost of getting products to your door.
- Reduced Cost Variances: A smaller difference between what you estimated and what you actually paid.
Key Takeaways
- Landed cost reflects the true total cost: It includes the purchase price plus all additional charges such as shipping, duties, insurance, and handling fees, everything required to bring goods to their final destination.
- D365 streamlines complex cost tracking: The Landed Cost module in D365 Finance & Supply Chain Management simplifies managing and allocating costs tied to international and domestic shipments, improving transparency and control.
- Cost accuracy drives profitability: Greater landed cost visibility helps you price products more effectively and make better financial decisions, supporting healthier margins.
- Enable data-driven decisions: D365 provides cost data and voyage tracking that can be leveraged in reporting and analytics to optimize sourcing strategies and reduce overall landed costs.
- Crucial for global operations: Mastering landed cost management is essential for businesses competing in a global supply chain, where cost control and visibility directly impact competitiveness. Mastering landed cost is crucial for success in today’s interconnected market.
Frequently Asked Questions (FAQs) about Landed Cost
- Why is landed cost important for my business? Landed cost helps you understand the true, full cost of your products, which is essential for accurate inventory valuation, profitable pricing, and smarter purchasing and sourcing decisions. Without it, you risk underestimating expenses and eroding margins.
- What kinds of costs are included in landed cost? Beyond the purchase price, landed cost typically includes freight or shipping charges, import duties and taxes, insurance during transit, customs brokerage fees and other handling or port-related costs.
- How does Microsoft D365 help with landed cost? The Landed Cost module in D365 Finance & Supply Chain Management lets you create voyage records, capture and allocate estimated and actual charges, manage duties, track cost variances, and distribute costs across items by weight, volume, value, quantity or manual entry. It integrates with procurement, inventory, finance and advanced warehousing for end-to-end visibility.
- Can D365 handle multiple currencies and vendors for landed cost? Yes. D365 supports multiple currencies, vendors, and complex shipping routes (including multi-leg voyages), making it well-suited for international trade and global supply chains.
- Does the Landed Cost module support Goods-in-Transit tracking? Yes. D365 moves items to a Goods-in-Transit warehouse location once a voyage is shipped. This enables you to track ownership and cost while goods are en route, before final receipt.
- Can I automate cost allocation in D365? Yes. You can configure auto-cost rules to apply standard charges (e.g., freight, insurance) automatically when creating voyages and set up predefined allocation methods so costs are distributed according to your business logic.
- Does D365 generate landed cost profitability reports out of the box? No. While D365 stores all landed cost data, reporting typically requires custom inquiries, SSRS reports, or integration with Power BI to create detailed profitability or variance analysis reports.
- Can landed cost be applied to domestic shipments, or is it just for imports? Landed cost functionality in D365 can be used for both international and domestic shipments, anywhere additional transport, handling or related costs need to be allocated to goods.
Wrapping Up: Unlock Your True Profitability
In today’s fast-paced world of global business, understanding landed cost isn’t just a nice-to-have – it’s a must-have for success. Microsoft D365 Finance & Supply Chain gives businesses the tools to handle these complex costs easily. By accurately tracking and analyzing every expense, you gain clear insights, make smarter choices, boost your profits and truly make your supply chain a strong advantage. It’s time to unlock the full power of D365’s Landed Cost module. Contact enVista today to learn more.
