Costing, units and landed cost

Choose average or first-in-first-out cost for each item, count in boxes or each, and add freight and duty to what the goods cost.

Updated Nov 9, 2026

# Costing, units and landed cost

These settings change what your stock is worth and what a sale costs you. Set them on each item under Stock, and use Stock in depth for units and landed cost.

Average cost or first in, first out

On the item, How cost is worked out has two choices.

Average cost: every sale takes stock at the average of what is on hand.
First in, first out: every sale takes the oldest stock first, at what it cost.

Both keep your stock value equal to the inventory accounts. Pick one per item. Perishable or price-swinging goods often suit first in, first out.

### Worked example

You buy 10 at 100 and then 10 at 120. You sell 15.

First in, first out: 10 x 100 + 5 x 120 = 1,600. The 5 left cost 120 each, worth 600.
Average cost: the average is 110, so 15 x 110 = 1,650. The 5 left are worth 550.

The total of cost of goods sold and stock left is 2,200 either way.

Units: a box is 12 each

On the item, Counted in (unit) is the base unit, such as each. Open Stock in depth, then Units, and Add unit: a unit name such as box and How many in one, for example 12. You can then buy or sell in boxes. Stock is always counted in the base unit, so 2 boxes comes in as 24 each. The price and cost are shown per unit you choose.

Landed cost

Landed cost is the extra cost of getting goods to you: freight, duty, insurance. It belongs in the cost of the goods, not in expenses.

Open Stock in depth, then Landed cost and Share an extra cost.
Choose the receipt, tick the goods the cost belongs to, and type the Extra cost.
Choose how to share it: By cost, By number or By weight. For weight, type Weight of one (grams) on the item.
Under Where the bill is owed, choose who you owe, such as the freight company. Choose Share it.

The goods now carry the extra cost and the screen shows the Cost after. Earlier landed costs lists what you shared before.

### Worked example

A receipt has 60 of A at 5 (300 in all, weighing 3 kg) and 40 of B at 17.50 (700, weighing 1 kg). Freight is 200.

By cost: A gets 60, B gets 140.
By number: A gets 120, B gets 80.
By weight: A gets 150, B gets 50.

If A is first in, first out, its cost per unit after sharing by cost is (300 + 60) / 60 = 6.

What to watch for

Landed cost is added after the goods came in. Any already sold took the earlier cost, so only what is still on hand carries it.
A good with no cost cannot be shared by cost. Use By number.
Do not also record freight as an expense, or it is counted twice.
Change an item's costing method before stock comes in. Switching later changes what future sales cost.