The Landed Cost feature is configured — three categories exist (Duty id 7, Freight id 8, Import Fees id 10, mapped to accounts 8200/8300/8400) — but it is almost never used. $1.69M of inventory was received at bare purchase price.
Aug shows the first (and only) 2 receipts with landed cost applied — $5,563 of received value. Everything else: zero allocation.
| Month | Inventory receipts | With landed cost | Received value | Value w/o landed cost |
|---|---|---|---|---|
| Feb 2026 | 92 | 0 | $6,672 | $6,672 |
| Mar 2026 | 113 | 0 | $16,455 | $16,455 |
| Apr 2026 | 123 | 0 | $17,898 | $17,898 |
| May 2026 | 157 | 0 | $222,146 | $222,146 |
| Jun 2026 | 243 | 0 | $652,652 | $652,652 |
| Jul 2026 | 250 | 0 | $662,592 | $662,592 |
| Aug 1–7 | 94 | 2 | $116,232 | $110,670 |
| Total | 1,072 | 2 | $1,694,646 | $1,689,084 |
6314: $0 all period. With ~$1.7M of goods received, real inbound freight and duty costs are almost certainly being absorbed somewhere invisible — bundled into supplier unit prices, billed to unrelated expense accounts, or not yet billed at all. Item margins are computed on purchase price, not landed cost, and there is no offsetting overhead line to even estimate the gap. Every product margin reported since February is overstated by the full (uncaptured) freight + duty burden.
128 vendor + SKU combinations had 3+ purchases in the window. Contract pricing is remarkably stable — first-vs-last bill rate drift is ~0% on 127 of 128 combos. But price integrity is leaking through a different door: Purchase Price Variance (bills posting at different costs than receipts), which jumped 12× in July.
Baseline ~$280/mo through June → $3,900/mo in Jul–Aug. Annualized at the new run rate: ~$47K of unmanaged cost variance.
| Vendor | PPV transactions | PPV posted (6 mo) | Share |
|---|---|---|---|
| Lavira Imports | 190 | $7,485.96 | 90.5% |
| Core4Solutions | 2 | $300.00 | 3.6% |
| FrisCo | 1 | $197.50 | 2.4% |
| Crown Foods | 1 | $150.00 | 1.8% |
| Grocer's Warehouse Inc. | 1 | $132.50 | 1.6% |
Lavira Imports: 190 separate transactions each posting small variances — the classic "no single invoice causes concern" pattern. Their headline SKU AM 95482 bills at a flat $0.48, so the variance is arising between receipt cost and bill cost, not on the contract rate.
Account 2220 Inventory Received Not Billed sat near zero for two years, then inflated to ~$138.9K by Aug 7 as purchase volume ramped. Receipt→bill matching is fast when it happens (median lag: 1 day across 1,032 billed POs) — the balance is built from ~56 POs that were received and never billed at all, plus 16 POs billed with no receipt.
June alone added $69K — 12% of that month's $583K inventory spend arrived and was never matched to a bill.
| PO # | Vendor | Open GRNI | First receipt | Age (days) | Status |
|---|---|---|---|---|---|
| PO395 | Food Distributor | $18,300 | Jul 2 | 36 | 31–60d |
| PO398 | Food Distributor | $15,600 | Jul 14 | 24 | 0–30d |
| PO396 | FrisCo | $12,600 | Jul 3 | 35 | 31–60d |
| PO3809 | Brocade Communications | $11,017 | May 25 | 74 | 61–90d |
| PO435 | Crown Foods | $10,775 | Jun 1 | 67 | 61–90d |
| PO399 | FrisCo | $10,000 | Jul 22 | 16 | 0–30d |
| PO391 | Food Distributor | $8,150 | Jun 30 | 38 | 31–60d |
| PO471 | Food Distributor | $4,865 | Jul 22 | 16 | 0–30d |
| PO3763 | Corrugated Solutions | $3,750 | Jun 1 | 67 | 61–90d |
| PO425 | Core4Solutions | $3,551 | Jun 1 | 67 | 61–90d |
| PO426 | Core4Solutions | $3,551 | Jul 3 | 35 | 31–60d |
| PO423 | Corrugated Solutions | $2,218 | Jun 1 | 67 | 61–90d |
Top open receipts >$2K past 14 days shown; 73 open POs in total. Food Distributor alone accounts for $47.3K of open GRNI across 6 POs.
| Workstream | Estimated monthly impact | Confidence | Nature of leak |
|---|---|---|---|
| 1. Landed cost not capitalized | Unquantifiable — structurally hidden | Structural | ~$282K/mo received (Jun–Jul avg) with 0% landed cost capture and no visible freight expense anywhere. Margins overstated by the entire freight+duty burden. |
| 2. Price variance (PPV) | ~$3,900 / mo | High — GL-posted | Bills posting above receipt cost, 90% one vendor (Lavira Imports), spread over ~190 small transactions. |
| 3. GRNI build-up | ~$43,600 / mo added (May–Aug avg) | High — GL-posted | Balance-sheet risk, not P&L yet: $76.5K aged >30 days is unverified cost sitting under inventory margin assumptions. |
| # | Offender | Issue | Exposure |
|---|---|---|---|
| 1 | Lavira Imports | $7,486 PPV across 190 transactions in 6 months — silent per-line cost creep | ~$15K/yr at current rate |
| 2 | Food Distributor | 6 POs received, never billed — largest single GRNI contributor | $47.3K open |
| 3 | FrisCo | $26.3K unbilled receipts + 6 identical $1,047.70 bills with no receipts + the SAL104 25× cost anomaly | $32.6K open + cost integrity |
| 4 | Crown Foods | $10.8K receipt unbilled 67 days, plus a dozen smaller open receipts | $16.5K open |
| 5 | Brocade Communications | Single $11K receipt unbilled for 74 days — oldest material item | $11.0K open |
The categories already exist (Duty / Freight / Import Fees). Make landed cost entry a mandatory step of the receiving procedure — estimated at receipt via cost-per-weight or %-of-value, trued up when the carrier bill lands. Until then, stop treating item margin reports as landed margin: they are purchase-price margins.
Median match lag is 1 day — the process works when it runs. Institute a weekly worklist: every receipt unbilled >14 days and every bill with no receipt gets an owner and a reason code. Chase the $76.5K aged >30 days now, starting with Food Distributor, Brocade and Crown Foods. Investigate the 6 identical FrisCo no-receipt bills for duplicate payment risk.
Route any bill posting >1% above receipt cost to a purchasing approval before it saves, and review PPV by vendor monthly. One vendor (Lavira Imports) generated 90% of variance in 190 invisible increments — exactly the drift pattern that never trips invoice-level review. Fix the SAL104 standard cost / UoM mismatch at the same time.