ERPNext Landed Cost Voucher: How to Add Freight & Duty to Item Cost (2026)

If you import goods or pay significant freight, the price on the supplier invoice is not what the stock costs you. Duty, shipping, insurance and clearing agent fees add to it, by an amount that depends on the goods, the route and the duty rate. Booking those as plain expenses keeps them out of your item cost and understates your cost of goods sold. The Landed Cost Voucher fixes that.

The point of a Landed Cost Voucher is truthful inventory valuation: it puts the costs of getting goods to your warehouse into the item's cost, so margins and COGS are real. I lead ERPNext and Frappe programmes at MithTech, a team of Frappe specialists in Bengaluru, and we set these up for importers and distributors.

Try it: what is your real per-unit cost?

Set the numbers to your last consignment. If the additional costs come out to more than a small share of the supplier invoice, booking them as plain expenses instead of an LCV overstates your gross margin on those goods.

What is a Landed Cost Voucher in ERPNext?

A Landed Cost Voucher is a document that spreads additional purchase costs (freight, customs duty, insurance, handling) across the items on a Purchase Receipt, raising each item's valuation rate. It exists because the real cost of stock is the supplier price plus what you spent getting the goods into your warehouse, and those costs usually arrive on separate bills from freight forwarders and clearing agents.

Once posted, the voucher raises the valuation of the received items by their share of the landed costs. Your inventory is then valued at landed cost, and when the items sell, the cost of goods sold includes freight and duty. This is what turns a rough margin into an accurate one for any business that imports or pays material inbound logistics.

Skimmable summary: A Landed Cost Voucher distributes freight, duty, insurance, and handling across received items, raising their valuation to landed cost. Inventory and cost of goods sold then reflect the real cost of getting goods to your warehouse, which is what Ind AS 2, IAS 2, ASC 330, FRS 102 and CAS 1 ask for.

How do I create a Landed Cost Voucher in ERPNext?

You create a Landed Cost Voucher in ERPNext by opening a new Landed Cost Voucher, selecting the relevant Purchase Receipt, adding the extra charges, choosing a distribution method, and submitting. The voucher then updates each item's valuation with its share of those charges. It should be posted while the items are still in stock so the cost attaches correctly.

Click through the demo below: each step shows what you do in the UI and what the ERPNext v16 controller does with your input, cited to file and line in the local checkout.

Here is the same sequence as a Steps block for readers who prefer the linear form:

Skimmable summary: Create a Landed Cost Voucher, fetch the Purchase Receipt, add each charge (freight, duty, insurance) in the charges table with its expense account, pick a distribution method, and submit. ERPNext updates item valuations, reposts SLEs and re-books GL entries, even for units already sold.

How are landed costs distributed across items?

Landed costs are distributed across items in ERPNext by Amount, Qty, or Distribute Manually, and the method you pick changes how fairly the cost lands on each item. Distribution by Amount spreads charges in proportion to each item's value; distribution by Qty spreads them per unit; Distribute Manually lets you assign exact shares when neither default is fair.

The core set_applicable_charges_on_item method at landed_cost_voucher.py:202 is where the split happens: it reads the enum value, scrubs it to a field name, and multiplies each item's share by the total charge. Weight-based distribution isn't in core; you need a small custom script that overrides this method to read total_weight instead.

Which method fits which charge type? Pick a charge below and the picker will tell you which basis to use on the LCV.

Skimmable summary: Landed costs distribute by Amount (value share), Qty (per unit), or Distribute Manually. Freight and inland transport go by Qty (or weight if you customise), insurance / customs / CHA / bank charges by Amount. Weight distribution requires a custom script.

When should I use a Landed Cost Voucher?

Use a Landed Cost Voucher whenever the extra costs of receiving goods are big enough to matter to your item cost: chiefly imports with customs duty and freight, or any purchase with substantial inbound logistics. If freight and duty are trivial, booking them as expenses is fine; once they materially change item cost, they belong in valuation.

Importers are the clearest case: duty, ocean or air freight, insurance, and clearing agent fees together can be a large share of cost, and leaving them out makes every margin report wrong. Distributors with heavy inbound freight benefit too; the wider setup is covered in my ERP guide for distributors and wholesalers, and the wider inventory picture in the ERPNext inventory management guide. For manufacturers, landed raw-material cost then flows into finished-goods costing and any standard costing variance analysis you run.

Skimmable summary: Use a Landed Cost Voucher when inbound costs materially affect item cost — imports with duty and freight, or heavy inbound logistics. Trivial charges can stay as expenses; significant ones belong in valuation so margins and COGS stay accurate.

Automation: seed the LCV, catch the mistakes

A common waste in a busy imports team is retyping freight, CHA and duty figures from a clearing agent's PDF into a manual LCV every week. Three small automations remove most of that. None needs a paid service; they run on your bench scheduler or a self-hosted n8n.

# Server Script → DocType Event → Purchase Receipt → on_submit
import frappe
from frappe.utils import flt

def after_purchase_receipt_submit(doc, method=None):
    if doc.currency == frappe.db.get_default("currency"):
        # skip pure-domestic GRNs unless you want LCV for them too
        return

    # Skip if we've already seeded one for this PR
    if frappe.db.exists("Landed Cost Voucher Purchase Receipt", {
        "receipt_document": doc.name, "docstatus": ["!=", 2]
    }):
        return

    lcv = frappe.new_doc("Landed Cost Voucher")
    lcv.company = doc.company
    lcv.posting_date = doc.posting_date
    lcv.distribute_charges_based_on = "Amount"
    lcv.append("purchase_receipts", {
        "receipt_document_type": "Purchase Receipt",
        "receipt_document": doc.name,
        "supplier": doc.supplier,
        "posting_date": doc.posting_date,
        "grand_total": doc.base_grand_total,
    })

    # ---- Fill in your actual heads here -----------------------------------
    #  These accounts must exist under the company's Indirect Expenses.
    #  Left as placeholders — swap for your chart-of-accounts codes.
    charges = [
        {"description": "Ocean freight",     "expense_account": "Freight & Forwarding - YC", "amount": 0.0},
        {"description": "Customs BCD",       "expense_account": "Customs Duty - YC",         "amount": 0.0},
        {"description": "CHA / clearing",    "expense_account": "Clearing Charges - YC",     "amount": 0.0},
        {"description": "Insurance premium", "expense_account": "Insurance - Import - YC",   "amount": 0.0},
    ]
    for c in charges:
        lcv.append("taxes", c)

    lcv.get_items_from_purchase_receipts()
    lcv.insert(ignore_permissions=True)  # DRAFT — accounts reviews & submits
    frappe.msgprint(f"Draft LCV {lcv.name} created against {doc.name}")

Deploy them in this order: the n8n workflow makes sure the charge amounts land in a place someone will see, the Server Script pre-fills the draft so accounts only has to check and submit, and the Client Script stops the two errors that most often waste a submit attempt.

What related issues might you also hit?

Landed cost leads into a family of ERPNext costing questions, each with its own post:

• FX drift on imports: if any part of the chain is in USD/EUR/CNY, the GRN's exchange rate matters more than you'd think. See ERPNext Landed Cost & FX gone wrong.
• Finished-goods costing: landed raw-material cost has to flow into the BOM cost roll-up. See ERPNext finished-goods costing.
• Inventory valuation basics: moving average vs FIFO, warehouse trees, negative-stock policy. See ERPNext inventory management.
• Standard costing variance: once landed cost is right, a purchase price variance means something. See ERPNext standard costing.

At a glance

Frequently asked questions