Tariff-related charges often show up on purchase orders as separate line items or as supplier pass-through costs. If you do not decide how to capture them, your inventory value, finished goods costs, and customer pricing can drift out of sync.

Cetec ERP supports a few ways to model tariffs depending on how your accounting team wants costs to land and how you want customers to see the charge. Below are three common approaches and what each one changes operationally.

Option 1: Add Tariffs Into Material Cost at Receipt

If you want tariffs to flow into inventory valuation and into your rolled-up finished goods costs, treat the tariff as part of the material cost. In practice, that is usually handled at receipt via landed cost, or after receipt using a manual cost adjustment if the charge comes in later.

• At receipt, include the tariff amount in the landed cost calculation.
• If the tariff cost is not known at receipt, adjust the material cost later to reflect the added expense.
• Update resale pricing as needed so margins reflect the new input cost.

This approach keeps inventory value aligned with what you actually paid, and it causes the tariff cost to roll into work order and finished goods cost as those materials are consumed.

Option 2: Add a Separate Charge Line on Quotes and Invoices

If you want the tariff to be visible to the customer as its own line item, you can pass it through as a charge on the quote and invoice without changing the underlying material cost in Cetec ERP. This is commonly done using misc charges tied to a component or bill of materials (BOM), or by adding a charge at the top level of the BOM to represent the overall tariff impact.

• Misc charge per component or BOM, where a “Tariff” charge is aggregated into a separate line item on the quote.
• Top-level BOM charge, which is often used when you want tariffs represented in the estimate and then carried as a customer-facing charge line.

This approach is usually the cleanest fit when the goal is customer visibility and consistent invoicing, but you do not want to change how inventory is valued for those purchased materials.

Option 3: Model Tariffs as a Tax Applied at the Line Level

In some cases you may prefer tariffs to behave like an automatic calculation applied during quoting and invoicing. In Cetec ERP, that can be modeled by creating a tax type for tariffs and applying it to the applicable quote or order line items.

• Create a tax type specifically for tariff charges.
• Assign the tariff tax to the relevant parts or quote lines.
• Let Cetec ERP calculate the tariff automatically when you quote and invoice.

This option keeps tariffs distinct from material costs and makes the charge consistent at the point of sale when it applies.

How to Decide Which Option to Use

If you want tariffs to roll into inventory valuation and finished goods costing, capture them in landed cost or cost adjustments. If the priority is showing the customer a separate pass-through charge, use charge lines. If you want a consistent calculated charge at sale, model tariffs as a tax and apply it at the quote line level.

For configuration detail, see: https://cetecerp.com/support/how-to/how-to-pass-on-tariff-charges.html

Key Takeaways

• Use landed cost or a cost adjustment when tariffs should be part of inventory value and rolled-up manufacturing cost.
• Use charge lines when you want tariff costs visible to the customer without changing material costs in the system.
• Use a tariff tax type when you want an automatic calculation applied during quoting and invoicing.
• Pick one approach intentionally so costing, quoting, and invoicing stay aligned with how your business treats the charge.

Conclusion

Tariffs are manageable as long as you decide where the cost should land, in inventory value, in customer-facing charges, or as an automatic tax at sale. Once your team picks a consistent method in Cetec ERP, your costing and pricing stay easier to explain internally and to customers.