Landed cost, allocated into the goods

Freight and duty are part of what your stock cost you. Booked as an expense instead, your inventory is understated, your margins look better than they are, and nothing anywhere tells you.

The problem with the usual approach

A freight bill arrives a fortnight after the container. By then the goods are on the shelf at the supplier price, some have already been sold at a margin that was never real, and the freight goes to an expense account because that is the quickest thing to do with it.

Nothing is obviously wrong afterwards. The books balance. The stock is simply worth less than it says, and the cost of sales is short by the same amount.

What Elvira does

• Tick an account: freight, duty, clearance: as a landed cost account. Any bill hitting it is then waiting to be allocated rather than quietly expensed.
• Allocate it across the goods by five methods: value, quantity, weight, volume, or by hand.
• It goes into the unit cost, so the margin on every later sale is right.
• A clearing account holds what has not been allocated, and the page checks that it equals the unallocated total. When those two disagree, something else has posted there and you are told.
• Everything unallocated is listed and aged, so freight from three months ago cannot sit unnoticed.
• A late bill can be allocated to goods already received, and the cost of what has been sold is restated.

The line that does the work

Elvira says it plainly on the screen: $1,850.00 of freight and duty has not reached the goods it belongs to. Until it does, your stock is undervalued and your expenses overstated. That sentence is the whole feature.