How to Create Shipping
Use this feature to record shipping or transportation costs associated with purchased products. Recording shipping costs allows Skillla to calculate the actual cost of inventory by including transportation expenses in the product cost.
Before you begin: A Purchase Invoice must already exist before a shipping record can be created. The shipping supplier can be the product supplier or a different supplier, such as a transport or logistics company.
The system automatically generates a unique Shipping Number for every shipping transaction created.
Step 1: Open the Shipping List
From the sidebar menu, click Purchases.
Select Shipping.
The Shipping List page will display all existing shipping records.
Step 2: Create a New Shipping Record
Click the Create button located at the top-right corner of the page.
The Create Shipping form will open.
Step 3: Enter Shipping Information
Complete the required fields:
| Field | Description |
|---|---|
| Date | Select the shipping date. |
| Shipping Supplier | Select the supplier or shipping company that provided the transportation service. |
| Purchase Number | Select the purchase invoice to which the shipping cost relates. |
| Reference | Enter an internal or supplier reference if available. |
| Description | Enter a brief description of the shipment. |
| Note | Enter any additional information about the shipment. |
| Status | Select the appropriate status. |
Step 4: Load the Purchase Invoice
After selecting the Purchase Number:
The system automatically loads all products from the selected Purchase Invoice.
The purchased quantities for each product will be displayed.
Step 5: Enter Shipping Costs
For each product listed:
| Field | Description |
|---|---|
| Unit Transport Cost | Enter the transport or shipping cost per unit of the product. |
The system automatically calculates:
Total Transport Cost = Unit Transport Cost × Purchased Quantity
The total shipping cost for each product is calculated automatically and displayed on the form.
Step 6: Save the Shipping Record
Review all information entered.
Click Save to record the shipping transaction.
If you wish to clear the form and start over, click Reset.
The system will automatically generate a Shipping Number and save the transaction.
Understanding the Inventory Effect
When a shipping record is created, the system will:
Allocate the shipping cost to each selected product.
Increase the inventory cost of the affected products.
Recalculate the Recent Average Cost of each product.
Display the updated average cost in the inventory records.
The updated average cost is used as the product's inventory cost for future stock valuation and sales transactions.
Understanding the Accounting Effect
Creating a shipping record updates the inventory valuation by incorporating transportation costs into the product cost.
The recalculated product cost becomes the basis for inventory valuation and cost calculations throughout the system.
The updated average cost is used when determining the cost of products sold, resulting in more accurate profitability calculations.
Impact on Financial Reports
Inventory Reports
Inventory reports are updated automatically.
The system updates:
Product transportation cost.
Recent Average Cost.
Inventory valuation.
Product cost history.
Profit & Loss Report
Shipping costs become part of the product cost.
When the products are sold, the updated average cost is used to calculate the Cost of Goods Sold (COGS).
This ensures gross profit and net profit are calculated more accurately.
Inventory Valuation
Inventory valuation increases by the amount of shipping costs allocated to the products, providing a more accurate value of stock on hand.
Sales Profit Analysis
Since shipping costs are included in the product's average cost, sales reports and profit analysis will reflect the true cost of each product sold.
Why Recording Shipping Costs Is Important
Recording shipping costs helps you:
Calculate the true landed cost of purchased products.
Maintain accurate inventory valuation.
Improve the accuracy of product costing.
Calculate gross profit more accurately.
Measure the real profitability of products.
Support better pricing decisions.
Produce more reliable inventory and financial reports.
Keep a complete history of transportation costs associated with purchases.
Best Practice
Record shipping costs as soon as transportation charges are known. Allocating shipping costs to purchased products ensures your inventory values, product costs, and profit calculations accurately reflect the total cost of acquiring inventory.