How MurrCloud Works - Finance & Reporting

Your freight and duty costs, baked into COGS automatically.

Importers pay two invoices for every shipment: one to the supplier, one to the freight forwarder and customs broker - often weeks apart. Here's how MurrCloud absorbs both into the true landed cost of each product, so COGS is always accurate without manual journal entries.

Reading time: 7 min | Best for: importers, distributors, manufacturers sourcing from overseas | Setup time: 1-2 hours (one-time)

01 - The Problem

Two invoices for every shipment. Only one makes it into your product cost.

Take Apex Industrial Supply, an importer of hardware and mechanical components. Apex buys from overseas manufacturers. The supplier invoice covers the unit price - but freight and customs duties arrive later, separately, from a freight forwarder and customs broker.

Without a proper process, those freight and duty bills get posted to a generic expense account, completely disconnected from the products that caused them.

Margin looks too high

Products appear more profitable than they are until freight and duties are manually reclassified.

COGS is understated

The cost posted on each sale only reflects the supplier price, not the true cost to land the goods.

Month-end manual work

Someone has to catch and reclassify freight and duty expenses - usually after the relevant sales are already reported.

02 - How MurrCloud Solves It

Freight and duties absorbed into product cost. Automatically.

MurrCloud's Landed Costs feature links freight forwarder and customs broker bills directly to the purchase receipts they relate to. The cost is split across every product in that shipment using the correct method, then absorbed into each product's inventory cost.

From that point forward, every sale of that product - through any channel - pulls the correct, fully landed cost into COGS. No manual entries, no month-end reclassification.

Costing method: This page illustrates the workflow using Average Cost (AVCO), the most common method for importers. MurrCloud also supports FIFO (First In, First Out), LIFO (Last In, First Out), and Standard Cost. Landed costs work across all four methods - the mechanics are the same; only how the unit cost is calculated differs. Contact MurrCloud to discuss which costing method fits your inventory and accounting requirements.
Step 1
Goods are received

Stock posts at the supplier's PO unit price. Landed cost is not applied yet.

Step 2
Freight / duty bill arrives

MurrCloud links the bill to the original receipt(s) and computes how to split the cost across products.

Result
AVCO unit cost updates

Product cost now includes freight and duties. Every future sale posts the correct, fully-loaded COGS.

03 - How Costs Are Split

The right split method for freight. The right one for duties.

Not all landed costs should be divided the same way. MurrCloud applies a different split method to each cost type so the allocation reflects what actually drives that cost.

Cost type Product name Split method Why
Ocean / air freight Freight - Import By Weight Ocean and air freight is priced by weight or volume, so heavier items absorb more cost.
Customs duties Customs / Duties By Current Cost Customs duties are typically assessed as a percentage of declared value, so higher-value items absorb more.
Why not split evenly per unit? Splitting by quantity ignores both weight and value differences between products. A 50 kg motor and a 0.5 kg bracket don't cost the same to ship - splitting equally would overstate the bracket's cost and understate the motor's.
04 - Monthly Workflow

Ten steps from freight invoice to accurate COGS.

This is the recurring process each time a freight forwarder or customs broker invoice arrives. One landed cost record handles multiple receipts, so a single freight bill that covers several purchase orders can be processed in one pass.

01
Goods are received as normal The purchase order is received via the standard receipt process. Stock posts at the supplier's PO unit price. No landed cost is applied yet.
02
Freight / customs bill arrives Identify which PO(s) and receipt(s) the bill relates to. A single freight bill often covers multiple shipments - confirm all of them before proceeding.
03
Create the Vendor Bill Create a Vendor Bill for the freight forwarder or customs broker using the Freight - Import or Customs / Duties product. This bill will be linked to the Landed Cost record later.
04
Open Landed Costs Navigate to Inventory -> Operations -> Landed Costs -> New.
05
Select the originating receipt(s) Choose the stock pickings from Step 1 that this freight or duty bill applies to. Multiple receipts can be selected if one bill covers several shipments.
06
Add landed cost lines Add one line per cost type - Freight - Import (amount from the freight invoice) and Customs / Duties (amount from the customs invoice) if billed separately.
07
Click Compute MurrCloud calculates the allocated amount per product line based on each cost type's split method - by weight for freight, by current cost for duties.
08
Review the allocation Check the computed split before validating. Heavier items should absorb more freight cost; higher-value items should absorb more duty. Flag anything that looks off.
09
Validate MurrCloud increases inventory valuation for each affected product, recalculates AVCO unit cost immediately, and posts the journal entry: Dr Inventory / Cr Landed Costs Clearing.
10
Link the Vendor Bill Set the Vendor Bill field on the Landed Cost record to the bill created in Step 3. This reconciles accounts payable with inventory valuation on the same document.
05 - What This Changes

The margin picture before and after landed costs.

Without landed costs
  • Product cost equals the supplier PO price only.
  • Freight and duties post to a generic expense account, disconnected from the product.
  • Gross margin looks artificially high until the freight bill is manually expensed.
  • Month-end reclassification required - often after the relevant sales are already reported.
With landed costs
  • Product cost equals PO price plus allocated freight plus allocated duties.
  • Freight and duties are absorbed into inventory value and flow through COGS automatically on each sale.
  • True landed cost is reflected the moment the freight bill is processed - even if it arrives weeks after receipt.
  • No manual journal entries or month-end adjustments required.
06 - One Thing to Know

Timing matters. Process freight bills promptly.

Landed costs can only be applied to stock that hasn't yet been fully sold at the time the freight or duty bill is processed. If a freight bill arrives a month after the goods were received and most of that batch has already sold, MurrCloud handles it correctly - but differently:

Remaining stock

Any unsold units from that receipt have their inventory value updated to reflect the new landed cost.

Already-sold units

The cost attributable to units already sold posts as a COGS variance - not a restatement of the original sale's margin.

Best practice

Process freight and duty bills within the same month as the goods receipt to minimize variance and keep margin reporting clean.

This is expected behavior, not an error. The longer a freight bill is delayed relative to when the stock sells through, the more of the landed cost appears as a variance rather than being baked into the original sale's reported margin. Prompt processing keeps the numbers clean. If a COGS variance does appear, confirm it with your accountant before adjusting anything.
07 - One-Time Setup

Three things to configure before the first landed cost.

Step Where What to do
Enable Landed Costs Inventory -> Configuration -> Settings Toggle on Landed Costs. This adds Inventory -> Operations -> Landed Costs to the menu.
Create cost products Products Create two service products: Freight - Import (split by weight) and Customs / Duties (split by current cost). Reference the clearing account on both.
Create clearing account Accounting -> Chart of Accounts Add 145000 - Landed Costs Clearing as an inventory-adjustment account. Kept separate from channel cost accounts (510xxx) because this is a product cost, not a channel cost.
08 - Monthly Checklist

A quick reference for whoever processes freight invoices.

  • When a freight forwarder or customs broker invoice arrives, identify every PO and receipt number it relates to before processing anything.
  • Create the Vendor Bill for the freight or duty invoice using the correct landed cost product (Freight - Import or Customs / Duties).
  • Create a Landed Cost record, select the relevant receipt(s), and add a line per cost type with the invoice amount.
  • Click Compute and review the allocated split per product before validating - confirm it looks reasonable relative to weight or value.
  • Validate the Landed Cost record.
  • Link the Vendor Bill to the Landed Cost record so accounts payable and inventory valuation are reconciled on the same document.
  • If the freight or duty bill arrives after some of the affected stock has already sold, confirm the COGS variance posting with your accountant rather than treating it as an error.

See what your products actually cost to land.

Book a 30-minute walkthrough and we'll map your freight and duty workflow into MurrCloud using your real suppliers and cost structure.

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