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Shippping and delivery costs are sometimes a hidden misunderstood expense for a business using companies to ship their goods to your location.  When the delivery charge is a separate charge sent to you, it is an understandable, straightforward cost. However many companies have delivery charges added on at the bottom of the invoice for the goods you are purchasing. In this case, the delivery charge should be considered separate from the goods and charged to it's own cost of goods sold account, titled 'delivery'.  There should also be an account set up in sales for delivery charges you will charge your customers. Keeping an accurate record of these charges helps you determine if you are charging your customers enough for their delivery charges based upon the charges you incur in purchasing your product.  Be aware of companies that charge excessive delivery charges. It is not unusual for some companies to do this, especially if you are buying products from another country. Some manufacturers in Canada charge excessively high delivery costs  to companies in the United States. If you think you are getting charged too much for delivery costs, it would be a good idea to stop purchasing products from that company and find another company that offers similar products but with lower delivery costs. You will save your company a lot of money by doing this.

Copyright Jeanine Pfeiffer

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