Zoho Inventory Landed Cost: How to Track Freight, Duty and Fees in 2027

What is landed cost in Zoho Inventory?

Zoho defines landed cost as the cost of bringing a product to your warehouse, excluding the cost of the goods themselves. Typical examples are freight, shipping, customs duty, insurance and handling fees. Without landed cost, these charges sit in an expense account and your item cost shows only the supplier price. Your margin per item then looks better than it really is.

With landed cost tracking on, Zoho adds these charges to the cost of the items they relate to. That cost then flows into inventory valuation and the cost of goods sold when you sell. Zoho Inventory values stock using FIFO or weighted average costing, depending on the costing method assigned to the item, so allocated landed costs follow whichever method you use. Test the effect on one item before you rely on it for pricing.

How do you set up landed cost in Zoho Inventory?

Setup takes a few minutes. Follow these steps in order.

1. 1Make sure inventory tracking is enabled for the items you import. Landed cost can only be allocated to inventory-tracked items.
2. 2Go to Settings (the gear icon) > Preferences > Items and tick 'I want to track landed cost on items'. Save.
3. 3Create service items for each charge type you use, such as Freight, Customs Duty, Insurance and Clearing Fees. Point each to the right purchase account.
4. 4Create or open the bill for the goods. Add the stock items as usual.
5. 5Click '+ Add Landed Cost' and add each charge as a line using your service items.
6. 6Choose 'Save as Open and Apply Landed Costs', or open a saved bill and click 'Allocate Landed Costs'.
7. 7Pick the allocation basis, review the charge per item, adjust if needed, and save.

Zoho Books has the same feature, with the setting under Settings > Items, called 'Track landed cost on items'. In Books, you can only switch it on if inventory tracking is enabled.

Should you allocate landed cost by value or by quantity?

Zoho allocates landed cost in proportion to either the value or the quantity of the items on the bill. You can also edit the charge amount for each item by hand. Weight and volume are not offered as allocation methods in Zoho's help page, so if your freight is priced by weight, work out the split yourself and type the amounts in.

Here is a simple example. A bill has 100 units of Item A at 10 each (1,000) and 100 units of Item B at 30 each (3,000). Freight is 400. By value, Item A gets 100 and Item B gets 300. By quantity, each gets 200, because both have 100 units.

How do you handle a freight bill from a different vendor?

This is the most common real-world case. Your supplier invoices the goods, and a freight forwarder or customs broker invoices the shipping and duty weeks later. Zoho supports this. Enter the forwarder's charges on their own bill as landed cost lines. Then open the goods bill, click More > Add Landed Costs, select the forwarder as the vendor, pick their bill number and the landed cost line, allocate it and save.

You can also apply unused landed costs from an earlier bill this way, and you can edit or delete an allocation later. Keep a simple rule for your team: one forwarder bill per shipment, with the supplier's invoice or purchase order number in the bill's reference field, so anyone can trace which goods a charge belongs to.

A simple monthly routine helps. When goods arrive, receive them against the purchase order and enter the supplier bill. When the forwarder or broker invoice arrives, enter it, allocate it to the goods bill the same week, and note the shipment reference. If a single freight invoice covers goods from several suppliers, allocate its charges across each goods bill in turn, so every bill carries its share. Before month-end, the purchasing lead checks that every freight and duty bill has been allocated. This keeps item costs current for the people who set prices.

What are the limits of Zoho Inventory landed cost?

The feature covers the core job well, but test these points in your own organization before you go live.

• Currency: Zoho's own community has questions from users whose goods are billed in one currency and freight in another. A bill uses one currency, so a separate forwarder bill is usually the cleaner route. Our Zoho Books multi-currency guide explains how exchange rates are handled.
• Timing: if you sell stock before the freight bill arrives, those early sales are costed without the freight. Check how your costing method treats the later allocation and agree a policy with your accountant.
• Item types: services and non-tracked items cannot receive landed cost.
• Allocation basis: there is no built-in weight or volume method, as noted above.
• Edition and region: Zoho's help pages do not list edition limits for landed cost. Confirm availability in your plan and data center on Zoho's pricing and help pages.

How do you check landed cost in reports?

Zoho Inventory includes a Landed Cost Summary report under the inventory valuation reports. Zoho says it shows the total landed cost per vendor, how much has been allocated to items on bills, and how much is still unallocated. Run it at month-end. An unallocated balance usually means a forwarder bill was entered but never applied to the goods.

Also compare the item's cost in the inventory valuation report before and after an allocation on a test bill. If you track batches or serial numbers, check one batch to confirm the cost lands where you expect. Have your accountant review the accounts used for freight and duty so the entries match how your business reports cost of goods sold.

How can Flowpeak help you set up landed cost?

Flowpeak is a registered Zoho partner based in Chennai, India, and our consultants hold Zoho certifications. We work remotely with importers and distributors worldwide. We set up your charge items and accounts, agree an allocation rule per charge type, train your purchasing team on forwarder bills, and test the costing on real shipments before go-live. You get a fixed price in writing, milestone payments and 30 days of free fixes. See our Zoho Inventory implementation service for scope.

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