Purchase Order Costs Explained


Overview

Sellercloud allows you to add Extra Costs to Purchase Orders along with common overhead costs which usually include expenses on purchased components (PO Subtotal), Shipping Costs, Taxes, and Other Total expenses.


Overhead PO Costs

  1. To correct PO costs on each component price, refer to the PO’s Items toolbox, and make the appropriate changes.
  2. To add Shipping Costs, Tax Amount, or Other Total expense over the Purchase Order, refer to the respective PO’s home page, the Total panel.
  3. In the upper right, click Edit.
  4. Enter the respective values, and click Save.

Overhead PO Costs


Extra PO Costs

You can add an Extra Cost to purchased items either manually or via file import.

Add an Extra Cost Manually

  1. Go to Purchasing > Manage POs.
  2. Select the Purchase Order you want to add extra costs to.
  3. In the upper right, click Edit.
  4. Click the Toolbox, and select Extra Costs.Extra Costs Toolbox Option
  5. On the Extra Costs panel, click the plus icon.Add New Extra Cost
  6. In the Add New Extra Cost dialog box, specify a brief explanation of extra cost added, the Cost value, and the type of cost distribution to be applied to PO items.
    DISTRIBUTION TYPE DEFINITION
    Normal The extra cost will be equally divided among the units ordered
    Item Cost Based The extra cost will be distributed in proportion to the items’ costs, and then divided per unit of each item
    Weight Based The extra cost will be distributed in proportion to the items’ weights, and then divided per unit of each item. Note: All items on the PO must have their product weight entered, else the calculation will revert back to diving the cost equally.
  7. Click Save.
  8. Save the changes.

Add an Extra Cost via a File Import

This method allows you to apply a specific extra cost to each PO item.

  1. Go to the Items panel that is on the Extra Costs PO’s page.
  2. In the upper right, click Edit.
  3. Click the Upload Products icon.Upload Extra Costs Icon
  4. Select the appropriate file from your computer, and click Save.Upload Extra Costs File Attach
  5. Alternatively, to save a template prior to file upload, click Download Template. Populate the respective columns. Upload the saved file.Extra Costs Template File
  6. Once processed, the Extra Cost Per Unit column is automatically completed.

Convert PO Cost into Different Currency

When you purchase from international companies, you may need to purchase in the local currency. Sellercloud POs support international currency and let you define the rate of conversion on the PO. Learn more about selling on international marketplaces.

  1. Go to Purchasing > Manage POs.
  2. Select the appropriate Purchase Order.
  3. Go to the General panel that is on the PO’s home page.
  4. In the upper right, click Edit.
  5. Click the Currency field, and select the appropriate monetary unit.
  6. In the Rate To US$ field, enter the requested conversion rate in respect to US dollar.
    Convert PO items cost into US dollar
  7. Save the changes.
  8. The product’s cost will be entered in the selected international currency, but upon receipt it will be converted based on the conversion rate set here.

Add Free-Cost Items to PO

If a Vendor offers you to purchase the n-th item for free, you are ought to add that item to a PO as follows.

  1. Open the appropriate Purchase Order. Alternatively, create a new one.
  2. Add all requested items with relevant cost indicated per each product.
  3. Add a free-cost product to PO scope as a separate line with a zero cost indicated.

CLENT SETTING DEFINITION
Allow Free PO Items to affect average cost Enable to include zero-cost PO items into Average Cost calculation
Enable currency symbol for PO Allows to convert PO’s items cost from different currency into US dollar
 Enable PO Custom Extra Cost per Unit Allows to add an extra cost to each PO unit
Consider PO Extra Costs When Calculating Product Costs Averages extra PO cost into product’s cost in order to give an accurate Profit & Loss Report. Once enabled, the Extra Cost Per Unit column will appear per each line item in a PO.
Do Not Include Third Party Shipping In PO Grand Total Excludes Extra Costs in the PO Grand Total

Understanding PO extra costs

You can add extra costs to a purchase order. Extra costs include shipping or third-party costs that are not included in the price of the item. These costs are often not billed to a third party or the vendor.

Enabling Consider PO Extra Costs when Calculating Product Costs in the Client Settings will average these costs into the product’s cost to give an accurate profit and loss report. An extra column will display next to each line item in the PO: Extra Cost Per Unit.

Custom extra costs

The Extra Costs page also lets you enter and define additional costs and set the distribution method per unit of each cost. Custom extra costs will not be included in the PO Grand Total.

Small order item fee

If a Small Order Amount and Fee has been configured on the vendor, the fee will display as Small Order Fee in the Payment panel. When applicable, it can be calculated in the PO total cost.

Shipping and other costs

Shipping and other costs are divided per unit. The method of calculating the PO extra costs per unit is based on the Client Setting Divide PO Item Extra Cost using:
  • Equally— If the product cost is $50.00 and shipping cost is $5.00, the average cost on the product’s Purchasing page will be $55.00. If you ordered 2 units with a total PO shipping cost of $5.00, the average cost will be divided among the units ordered, resulting in an average cost of $52.50
  • Cost Based— If there are different products in the PO with varying costs, the extra costs will be distributed in proportion to the items’ cost, and then divided per unit of each item
  • Weight Based— If there are different products in the PO with varying weights, the extra costs will be distributed in proportion to the items’ weight, and then divided per unit of each item. Note: All items on the PO must have their product weight entered, else the calculation will revert back to diving the cost equally.

You have the option to exclude shipping costs in the PO Grand Total. This is helpful if you are paying a third party for shipping. This is controlled by enabling Do not include Third party shipping in PO Grand Total in the Client Settings.

Click here for instructions about adding extra costs to POs.
  • Go to Client Settings > Enable PO Custom Extra Cost Per Unit.
  • Open a PO > Select Action > Upload Extra Cost Per Unit > Go. Here, you can download the template, add the extra costs, and import it back.sellercloud epload extra cost per unit

Converting currency rates on POs

When purchasing from international companies, you may need to purchase in the local currency. Sellercloud POs support international currency and let you define the rate of conversion on the PO. Learn more about selling on international marketplaces.

Click here for instructions about converting currency rates
  1. Go to Client Settings > Enable currency symbol for PO.
  2. Open a PO > Choose the Currency > Enter the Rate to US$ and Rate From US$.
    • The cost values of the products will be entered as the international currency, but will be converted for average cost when received, based on the conversion rate set here.sellercloud currency conversion

Managing free items in a PO

Vendors may offer a deal for free items, such as buy 10 get 2 free. When the purchaser sends the PO to the vendor, they create two different lines for the same item – one at full price and one free.

An item that already exists in a PO can only be added on a separate line with a price of 0 by using a file upload.

By default, Sellercloud will not factor items priced at zero dollars into its Average Cost calculation, but you can enable Allow Free PO Items to affect average cost in Client Settings to include these items.



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