What is a Item Charge in Business Central?

A Business Central mechanism that adds costs like freight, customs, or insurance to the inventory value of items you bought or sold.

An Item Charge in Business Central represents an extra cost that belongs to a trade of items: freight, customs duties, insurance, or handling fees. Instead of posting such costs straight to an expense account, you assign them to specific item ledger entries so they become part of the inventory value. This is how BC handles landed costs.

The flow: on a purchase invoice (or order, or credit memo), you add a line of type Charge (Item), enter the amount, and open the Item Charge Assignment page. There you distribute the amount across receipt lines, either from the same document or from other posted receipts pulled in with functions like Get Receipt Lines. BC can suggest the split equally, by amount, by weight, or by volume.

On posting, BC creates value entries attached to the assigned item ledger entries. The unit cost of those items rises accordingly, and the Adjust Cost - Item Entries process carries the updated cost into COGS when the items are sold. Quantities never change: an item charge is pure value.

Two practical notes: the charge line uses its own posting groups, so VAT on a freight invoice is handled correctly even when it comes from a different vendor than the goods, and item charges also exist on the sales side (for example freight billed to customers or charges assigned to sales shipments), where they adjust the profit of a sale rather than inventory value.

Related terms

• Purchase Invoice, A document recording a vendor's bill for goods or services received, used for accounts payable processing in Business Central.
• Purchase Order, A formal document sent to a vendor to order goods or services, with agreed quantities, prices, and delivery terms.
• Goods Receipt, The process of recording received items against a purchase order in Business Central, updating inventory and triggering accruals.
• General Ledger, The core accounting record in Business Central where all financial transactions are ultimately posted and stored.
• Posting Group, Setup records in Business Central that determine which G/L accounts a transaction is posted to, based on who and what is involved.

How Zentriq helps

Zentriq's AI tools automate many of the manual processes around item charge in Business Central. Learn about the Zentriq Agent or try Zentriq PunchOut to see how AI simplifies procurement in BC.