Item Charges are used to assign additional costs related to a purchase, such as freight, handling, tooling, or other vendor fees, to inventory items. Rather than tracking these costs separately, Business Central can spread them across purchased items so they become part of the item's total cost.

Setting up an item charge
To create an item charge, open the Item Charges page, create a new charge, assign a posting group, and add any required tax information or dimensions. Once created, the charge can be used on purchase documents.

Using item charges on purchase orders
Item charges can be added directly to a purchase order using a Charge (Item) line. After entering the charge amount, use Item Charge Assignment to distribute the cost to the related purchase lines.
When an order contains multiple items, Business Central can allocate the charge using methods such as Equal, By Amount, By Weight, or By Volume. Charges must be assigned before posting the receipt or invoice.

Using item charges on purchase invoices
Item charges can also be applied through a purchase invoice, which is helpful when the charge comes from a different vendor or is billed separately from the original purchase order. Select the related receipt lines, assign the charge, and post the invoice to update inventory costs.

Key takeaways

• Item charges help capture the full cost of purchased inventory.
• Charges can be applied through purchase orders or purchase invoices.
• Costs can be distributed across one or multiple receipt lines.'
• Assigned charges update inventory valuation and cost of goods sold, even if the items have already been sold or consumed.