How to record a freight bill that arrives after the goods on Shopify
Add the bill to the stock you still hold, dated when you record it, and leave the original receipt and past sales as they were. Under weighted average the bill raises the average of the units on hand now; under FIFO it raises only the units left from that delivery. Shopify won't do this for you: Cost per item is one fixed number, and freight added to a transfer as a cost adjustment is not spread onto products. Work it out and update Cost per item, or use a costing app that handles late bills.
Why a late bill matters
- Inbound freight is part of inventory cost: the IRS counts freight-in as cost of goods sold (Publication 334), and IAS 2 includes transport and handling in the cost of purchase (IAS 2.11).
- The bill often comes after some of the stock has sold.
- Editing the old cost does not help: each Shopify order keeps the cost it was created with.
The rule in four lines
- The original receipt stays as it was. The bill is a second entry that points to it.
- It takes effect when you record it. Keep the bill's own date in the note.
- It goes on the stock you still hold. Units already sold keep the cost they were sold at.
- A closed month stays closed. If the bill belongs to a month you have closed, record it in the open month.
A worked example
1 September: 100 units arrive at $5.00. By 15 September, 40 have sold. 15 September: 40 more arrive at $6.00. 3 October: a $120.00 freight bill arrives for the 1 September delivery. You hold 100 units.
| Units | Value | Average | |
|---|---|---|---|
| Before the bill | 100 | $540.00 | $5.40 |
| + Freight bill | $120.00 | ||
| After | 100 | $660.00 | $6.60 |
| Layer | Units | Before | After |
|---|---|---|---|
| 1 September | 60 | $5.00 | $7.00 ($120.00 ÷ 60 = $2.00 more) |
| 15 September | 40 | $6.00 | $6.00 |
| Stock value | 100 | $540.00 | $660.00 |
- Both methods end at $660.00 of stock. They differ in which units carry the bill.
- The 40 units sold in September keep $5.00. Their share of the bill moves into the stock still held and reaches cost of goods sold when that stock sells. If the share is large, ask your accountant whether to expense it in the current month instead.
One bill across several products
Split the bill across the delivery's lines first, then apply the rule to each product:
- Freight: by units, weight or value. Weight fits mixed sizes; units fit similar items.
- Duty: by value, since duty is charged on value.
The full method, with an example that adds up to the cent: landed cost per unit on Shopify.
Doing it by hand in Shopify
- Find the units on hand now for each product in the delivery.
- Work out the new cost with the table above.
- Update Cost per item in the bulk editor. It applies to orders from now on.
- Keep the bill and your sheet with your records.
How True COGS records a late bill
- On paid plans. The bill is recorded against the delivery it belongs to, split by units, weight or value for freight, and by value for duty, brokerage and port fees.
- The original receipt is never changed. A bill dated before the delivery is refused, and so is a bill dated in a closed month.
- The bill is spread over Shopify's units on hand at the time you record it. Under FIFO it lands on the delivery's remaining units, and past margins do not change.
- If a product's units on hand can't be read, the bill is refused for it, never guessed.
Related guides
Questions merchants ask
Should I change the original cost when a freight bill arrives late?
No. Leave the original receipt as it was and record the bill as a second entry on the stock you still hold. Editing the old cost loses what you knew at the time, and Shopify orders keep the cost they were created with anyway.
Does a late freight bill change last month's profit?
Not with this method. Units already sold keep their cost. The bill raises the cost of the stock you still hold.
What if all the stock from that delivery has sold?
Then no stock is left to carry it. Ask your accountant whether to record it in cost of goods sold for the current period.
How do I split one freight bill across several products?
By units, weight or value. Duty is usually split by value. Then add each product's share to the stock it still holds.
Can I add freight to a Shopify purchase order after receiving?
You can add Shipping amount and Customs duties to a shipment on the linked transfer. Shopify shows them in the Cost summary but does not add them to Cost per item.
Try True COGS free. True COGS is an inventory costing app for Shopify by Nexus Logic Systems. It records the price you paid on every delivery (a received purchase order or a transfer), with its share of freight and duty on paid plans, keeps every price with its date, and writes your moving weighted average cost, or FIFO cost on a paid plan, to Shopify's Cost per item. It is free for up to 25 variants with a cost on record; paid plans start at $29 a month or $290 a year.
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