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Initializing BC Inventory Balances with Landed Costs

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Posted on by ME-31032107-0

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We are in the process of migrating from Dynamics GP to BC. As part of the migration, we are bringing over current OnHand Inventory Qtys and Costs from GP by creating Item Journals in BC. This works well if all we wanted was the Qty & Cost by Item/Location & Bin Code.

But we also want to break down the costs between Product (PO) and Landed Costs (Tariffs, Freight, etc.). In GP, we can break down the costs this way.

I imagine we will be able to do the same in BC when we start receiving new POs, and enter the Landed Costs as Item Charges on Purchase Invoices.

But I don't see a way to breakdown our initial inventory balances between Product and Landed costs.

Is there a way to do this with Item Journals? Or is there another way? We can't use POs or Purchase Invoices, the number of items is far too great.

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Dynamics 365 Business Central

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YUN ZHU 91,847 Super User 2025 Season 2 on at

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Initializing BC Inventory Balances with Landed Costs

As Valentin mentioned, this is accomplished in Business Central through the Item Charge.
I've experienced clients who also need to import uncompleted orders or purchase/sales history. When this is required, they don't import directly through the Item Journal, but instead post it through the Purchase Order, although this can be quite cumbersome to organize.

https://learn.microsoft.com/en-us/dynamics365/business-central/payables-how-assign-item-charges?wt.mc_id=DX-MVP-5004336

Or you can split the cost amount directly through General Journal, but this will not directly relate to the cost of the item. It will only affect the financial report.

Hope this can give you some hints as well.

Thanks.

ZHU

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Alex A 2,546 on at

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Initializing BC Inventory Balances with Landed Costs

There is another option:

To be able to track Landed Costs while importing opening balances, use a two-step process:

* Testing: Always test in a sandbox—post a small batch to verify Value Entries reflect the split correctly.

1.) Import and Post the Product (Base) costs via Item Journal Configuration Package:

- In the Configuration Package, map your import data to Item Journal Lines with only the base product cost in the Unit Amount field (exclude landed costs here).

- Validate and apply the package to generate Item Journal Lines.

- Post the journal. This records:

- Item Ledger Entries for quantity.

- Value Entries with Entry Type = Direct Cost (base product cost only).

2.) Add Landed Costs via Revaluation Journal:

- After posting the base inventory, navigate to Item Revaluation Journals.

- Use the Calculate Inventory Value action to populate lines for the relevant items (filter by Item No., Location Code, etc., as needed).

- Manually adjust the Unit Cost or Amount fields to include only the landed cost portion (e.g., freight). The system calculates the difference automatically.

- Post the journal. This creates additional Value Entries with Entry Type = Revaluation, effectively adding the landed cost without altering quantities.

- The total inventory value now reflects the full landed cost, but you can drill down into Value Entries (from the Item Card > Related > Entries > Value Entries) to see the breakdown by Entry Type.

Note:

Value Entries: "Direct Cost" for product/base, "Revaluation" for adjustments like landed costs.

If you need landed costs specifically tagged as "Item Charge (Direct Cost)" in Value Entries, this isn't directly possible for opening balances, as Item Charges require a posted purchase receipt. The revaluation approach is the closest standard method.

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Valentin Castravet 29,139 Super User 2025 Season 2 on at

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Initializing BC Inventory Balances with Landed Costs

I understand why you want this, but this approach isn’t really common for opening balances because the amount of effort outweighs the benefit. Most of the time opening balances contain the sum of the product and landed costs.

In Business Central, landed costs are handled with Item Charges, and those only work on sales/purchase documents, so purchase orders are the only way to split base cost from landed cost at opening.

If you wanted to, you can load initial quantities and product cost on a purchase order, then apply the landed cost on the same or a separate purchase order. You can import either purchase orders or item journals via configuration packages so for this reason POs are only slightly slower.

You’ll need to align posting groups so Item Charges post to the same G/L as Inventory. After posting the product and landed costs via POs, you’ll have balances in Inventory and A/P. You can post a journal entry to offset them to clear those accounts so only the Inventory subledger remains with a balance.

Valentin Castravet
Work: Zander ERP Services
Blog: Dynamics 365 Business Central Insights
LinkedIn: www.linkedin.com/in/valentin-c-0500a247/

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