> ## Knowledge Base Index
> Fetch the complete knowledge base index at: https://help.assisty.ai/sitemap.xml
> Use this file to discover available pages before exploring further.
> Pure-Markdown content can be obtained by appending a '.md' suffix to the content URLs listed in the sitemap (without the trailing slash).

# Purchase Order Financial Features

# User Guide: Purchase Order Financial Features

This guide explains how to manage shipping, taxes, discounts, adjustments, landed cost, and margins on your purchase orders.

---

## 1. Overview

Assisty provides comprehensive financial tracking on every purchase order:

* **Shipping cost** with optional shipping tax
* **Discounts** (fixed amount or percentage) and **adjustments** (fees or credits)
* **Tax types** configurable per supplier and per line item
* **Landed cost** — the true cost of each product including allocated shipping and adjustments
* **Margin analysis** — selling price vs. cost and landed cost margin per item
* **Column customization** — choose which financial columns are visible

All financial fields are calculated automatically and reflected in exports (PDF, Excel, CSV) and email attachments.

---

## 2. Shipping Cost

### Adding Shipping Cost

1. Open a PO in **Draft** or **Pending Approval** status.
2. Click **Edit Financials** (or the pencil icon in the Order Summary section).
3. The **Financial Edit Dialog** opens.
4. Enter the **Shipping Cost** amount.
5. Optionally set a **Shipping Tax Rate** (percentage) — the shipping tax is calculated automatically.
6. Click **Save**.

### How Shipping Affects Totals

```
Grand Total = Subtotal + Item Tax + Shipping + Shipping Tax - Discount + Adjustment
```

Shipping cost is also used in the landed cost calculation (allocated across items).

---

## 3. Discounts and Adjustments

### Discounts

You can apply a PO-level discount in two ways:

* **Fixed amount** — e.g., $50 off the subtotal
* **Percentage** — e.g., 10% off the subtotal

The discount reduces the effective cost of items, which affects the landed cost calculation per IAS 2 / ASC 330 accounting standards.

### Adjustments

Adjustments are additional fees or credits applied to the PO:

* **Positive amount** — an additional fee (e.g., handling charge, inspection fee)
* **Negative amount** — a credit (e.g., supplier rebate, early payment discount)
* **Adjustment note** — optional description of what the adjustment is for

### How to Add Discounts and Adjustments

1. Open the **Financial Edit Dialog** (same as shipping).
2. Set the **Discount Amount** and choose **Fixed** or **Percentage**.
3. Set the **Adjustment Amount** (positive for fees, negative for credits).
4. Optionally add an **Adjustment Note**.
5. Click **Save**.

---

## 4. Tax Configuration

### Setting Up Tax Types

1. Go to **Adjust Settings > Purchase Orders**.
2. Select the **Tax Setup** tab.
3. Here you can:
   * **Create** new tax types (e.g., GST 10%, VAT 20%, HST 13%)
   * **Edit** existing tax types (name and rate)
   * **Set a default** tax type for your store
   * **Deactivate** tax types you no longer use

Tax rates are stored as decimals (e.g., 0.10 for 10%) and displayed as percentages in the UI.

### Supplier Default Tax Type

Each supplier can have a default tax type that's automatically applied to all PO items:

1. Go to **Create Purchase Orders > Supplier Management**.
2. Open a supplier's detail page.
3. In the **Financial** section, select a **Default Tax Type**.
4. All new POs for this supplier will automatically apply this tax type to every item.

This works across all 5 PO creation methods:
* Creating from the Supplier Detail page
* Creating from the Buying Table
* Creating from the Buying Calendar
* Automated PO generation
* CSV import

### Per-Item Tax on PO Detail

On the PO detail page (when the Tax column is enabled):

* Each line item shows its **tax type** and **tax rate**
* Click the tax dropdown to change the tax type for a specific item
* **Bulk Apply** — apply a tax type to all items at once
* **Clear All** — remove tax from all items

Tax is **excluded from landed cost** — it does not affect the landed cost calculation.

---

## 5. Landed Cost

### What Is Landed Cost?

Landed cost is the true cost of each product, factoring in shipping and adjustments allocated across all items. It gives you a more accurate picture of what each product actually costs to acquire.

### Calculation Methods

You can choose between two methods in **Adjust Settings > Purchase Orders > Landed Cost** tab:

**Per-Value Allocation (default):**
```
Discounted Subtotal = Subtotal - Discount
Landed Cost Ratio   = (Discounted Subtotal + Shipping + Adjustment) / Discounted Subtotal
Per-Item Landed Cost = Unit Price x Discount Factor x Landed Cost Ratio
```
This method allocates more shipping/adjustment cost to expensive items proportionally.

**Per-Unit Allocation:**
```
Shipping Per Unit    = Shipping / Total Units
Adjustment Per Unit  = Adjustment / Total Units
Per-Item Landed Cost = (Unit Price x Discount Factor) + Shipping Per Unit + Adjustment Per Unit
```
This method distributes shipping and adjustments equally across all units regardless of price.

### When Is Landed Cost Calculated?

Landed cost is automatically calculated when:
* A PO is created (including auto-generated POs)
* Financial data is updated (shipping, discount, adjustment changes)
* Items are added, removed, or quantities change

### Viewing Landed Cost

1. Enable the **Landed Cost** column in **Adjust Settings > Purchase Orders > Line Item Columns**.
2. On the PO detail page, each item shows its landed cost value.
3. Click on a landed cost value to see the **breakdown popover**.

### Landed Cost Breakdown

Clicking a landed cost value shows how it's composed:

**Per-Value method:**
| | Per Unit | Total |
|--|---------|-------|
| Unit price | $10.00 | $50.00 |
| x Ratio | 1.18 | |
| **Landed cost** | **$11.80** | **$59.00** |

**Per-Unit method:**
| | Per Unit | Total |
|--|---------|-------|
| Unit price | $10.00 | $50.00 |
| + Shipping | $1.88 | $9.40 |
| + Adjustment | $0.63 | $3.15 |
| **Landed cost** | **$12.51** | **$62.55** |

### Landed Cost in Order Summary

The Order Summary section shows:
* **Landed Cost Ratio** — the multiplier applied to each item (per-value method)
* **Avg Landed Cost / Unit** — the average landed cost across all items

Both show formula tooltips on hover.

---

## 6. Margin Analysis

### Per-Item Margin

When enabled, each line item can show:

* **Margin (%)** — simple margin based on selling price vs. unit cost
  ```
  Margin % = (Selling Price - Unit Cost) / Selling Price x 100
  ```
* **Landed Margin (%)** — margin based on selling price vs. landed cost
  ```
  Landed Margin % = (Selling Price - Landed Cost) / Selling Price x 100
  ```

Margins are **color-coded**:
* **Green** — healthy margin (above threshold)
* **Yellow** — moderate margin
* **Red** — low or negative margin

### Order Summary Margins

The Order Summary section shows aggregate profitability:
* **Total Revenue** — sum of selling price x quantity for all items
* **Total Margin** — total revenue minus total cost
* **Average Margin %** — across all items
* **Landed Margin %** — margin accounting for landed cost

### Enabling Margin Columns

Margin columns are hidden by default. To enable them:

1. Go to **Adjust Settings > Purchase Orders > Line Item Columns**.
2. Toggle on **Margin** and/or **Landed Margin**.
3. The columns will appear on all PO detail pages.

---

## 7. Column Customization

All financial columns (tax, landed cost, margin, shipping/unit, adjustment/unit) are **hidden by default** and must be enabled in settings before they appear on PO detail pages and exports.

To enable financial columns: go to **Adjust Settings > Purchase Orders > Line Item Columns** and toggle on the columns you need.

For the complete guide on column customization, including custom columns, metafields, drag-and-drop reordering, and export behavior, see: **[Customizing Purchase Order Line Item Columns](https://help.assisty.ai/en/article/customizing-purchase-order-line-item-columns-dvg9v7/)**.

---

## 8. Order Summary

The **Order Summary** section on every PO detail page provides a comprehensive financial overview:

| Line | Description |
|------|-------------|
| **Subtotal** | Sum of (quantity x unit price) for all items |
| **Item Tax** | Sum of per-item tax amounts |
| **Shipping** | Shipping cost |
| **Shipping Tax** | Tax on shipping |
| **Discount** | Applied discount (fixed or calculated from percentage) |
| **Adjustment** | Fee or credit amount |
| **Total Tax** | Item tax + shipping tax |
| **Grand Total** | Final total after all additions and deductions |
| **Landed Cost Ratio** | Multiplier showing cost impact of shipping/adjustments |
| **Avg Landed Cost / Unit** | Average true cost per unit across all items |

The summary section is collapsible and always reflects the current state of the PO.

---

## 9. Tips and Best Practices

* **Set supplier tax types once:** Configure the default tax type on each supplier profile. All future POs automatically apply the correct tax.

* **Use per-value allocation for mixed-price POs:** When your PO has items at very different price points, per-value allocation distributes costs more fairly (expensive items get more of the shipping cost).

* **Use per-unit allocation for uniform items:** When all items are similarly priced, per-unit allocation gives a simpler, more intuitive breakdown.

* **Enable only the columns you need:** Financial columns are hidden by default. Enable landed cost and margin only if you actively use them — this keeps the PO detail page readable.

* **Check landed cost before receiving:** The landed cost is what gets synced to Shopify's "Cost per item" on receive. Review it to ensure accurate inventory valuation.

* **Use adjustments for one-off charges:** Inspection fees, customs duties, or supplier credits — use the adjustment field with a note for clear record-keeping.

* **Tax is excluded from landed cost:** This follows IAS 2 / ASC 330 accounting standards. Tax is tracked separately and does not inflate your product costs.

---

For general PO management (statuses, receiving, returns, etc.), see: **[Understanding and Managing Purchase Order Details](https://help.assisty.ai/en/article/understanding-and-managing-purchase-order-details-1th5lfd/)**.

For multi-currency support, see: **[Multi-Currency Purchase Orders](https://help.assisty.ai/en/article/multi-currency-purchase-orders-1k1t95x/)**.