This article will explain what a Landed Cost Adjustment (LCA) is and how you can use it in your Blackpurl


The Landed Cost Adjustment (LCA) feature in Blackpurl allows the user to allocate Other Charges on a Vendor Invoice directly against the inventory cost of items which were received on that same invoice


Please have a discussion with your team to confirm if the Dealership is using Landed Cost Adjustment 



What is Landed Cost Adjustment (LCA)


When a Dealership receives parts from their Vendors they quite often incur other costs on the Vendor Invoice besides the costs of the parts themselves


These other costs typically are for charges such as freight / shipping or environmental fees etc and are processed as part of the Vendor Invoicing in Blackpurl as an Other Charges


These Other Charges can now be included as part of the final inventory cost of those parts received and will enables Dealerships to have a lot more accurate profitability reflected on the parts when they are sold - the true cost of the parts



How to allocate a Land Cost Adjustment 


On the Vendor Invoice, once you add the relevant Fee in the Other Charges section the option to Include other charges as part of the inventory cost? will pop up


To enable this action, simply move the relevant toggle




By default the system will proportionally allocate the Other Charges against ALL of the line items on the Vendor Invoice.  This proportional allocation is based on the total cost of each line item in relationship to the total cost of all of the line items


The Applying other charges to invoice items window will pop up for you to review the proportional allocation on the Summary tab 



The user can select the proportion allocate as is OR If they wish to make changes to the allocation, click on the Details tab and review each of the line items


Do you want to NOT allocate to specific line items / Do you want to allocate more to a specific line item etc - just make your changes accordingly



Note the Pre-Adjustment and Post Adjustment allocation totals down in the bottom section as you make your changes


You can also toggle between the Summary tab and the Detail tab until you are happy with the result


Once you are happy with the result, simply click APPLY CHANGES


On the Vendor Invoice on the relevant line items you can also see the result of the Landed Cost Adjustment 



If you want to see further details on that particular line item (or any other line item), click on See how it's calculated and the How Inventory cost is calculated window will pop up for review 





Third Party Charge to be part of the Landed Cost Adjustment


In some instances the Dealership may want a Third Party charge to be part of the Landed Cost Adjustment calculations


For example - transport costs or custom fees etc that have been billed to the Dealership by a separate Vendor on a separate Vendor Invoice but the Dealership still wants to spread the cost across the parts that were received


You will need to know what the Other Charges are from the Third Party before you can process the Parts Vendor Invoice 


In order for you to allocate a cost against the inventory items on a Parts Vendor invoice, those costs must be added to the Other Charges section of the Parts Vendor Invoice


But of course you do not want the total of your Vendor Invoice to change so you would simply add this cost from the “Other Invoice” twice to the Other Charges section of your Parts Vendor Invoice


Once as a positive value and once as a negative value using the same Fee code 





Now when you use the Landed Cost Adjustment feature to allocate Other Charges against the Parts Vendor Invoice inventory items BUT you only allocate the positive charge only


Do not allocate the negative charge - if you do then that will cancel out what you are trying to achieve


You do this in the Details tab of the Landed Cost Adjustment tool as seen here




This will mean that you have allocated the Landed Cost Adjustment for the Third Party Charges and the Part Vendor Invoice is still at the right total 


You will still need to process the Third Party Invoice in your Accounting package or Blackpurl as the process we did above did not do that - all it did was add the Other Charges as part of the Landed Cost Adjustment