Integration freight invoicing and purchase invoicing

If a purchasing company is responsible for the transportation of goods and hires a carrier to transport the goods, after transportation, the carrier sends an invoice to the purchasing company. The freight rate that a company must pay to the carrier is called freight costs.

Master data

To invoice your external business partner for freight, you must define the following master data:

  • In the Buy-from Business Partners (tccom4120s000) session, select the Invoice BP for Freight check box to indicate that you want the business partner to pay for the freight costs you make. This check box is used as a default for the Invoice External BP field in the Purchase Orders (tdpur4100m000) session, and the Invoice External BP field in the Request for Quotation - Buy-from BP (tdpur1505m000) session, but can be overwritten in these sessions.

  • In the Invoice-to Business Partners (tccom4112s000) session, define the Invoice for Freight Based On field as:

    • Freight Costs
      If you want the freight costs for a shipment or load to be based on the best information currently available. The freight invoice amount is based on a carrier rate book in Pricing. These costs are also known as estimated freight costs.
    • Freight Costs (Update Allowed)
      If you want the freight costs to be invoiced after matching the carrier invoice to a certain load or shipment. Initially, the freight invoice amount is based on a carrier rate book in Pricing. These costs are also known as actual freight costs.
    • Client Rates
      If you want the freight invoice amount to be based on a client rate book in Pricing. This rate book stores freight service rates for a specific business partner.

  • If the Invoice for Freight Based On field is Freight Costs or Freight Costs (Update Allowed), in the Invoice-to Business Partners (tccom4112s000) session, you can define the following fields to add a cost plus amount or a cost plus percentage to the invoice:

    • Additional Percentage
      The percentage with which the freight invoice amount must be increased.
    • Additional Amount
      The amount with which the freight invoice amount must be increased.
Note

The Invoice for Freight Based On field is used as a default for the Freight Costs Based On field in the Purchase Orders (tdpur4100m000) session and the Freight Costs Based On field in the Request for Quotation - Buy-from BP (tdpur1505m000) session, but can be overwritten in these sessions.

Explanation of invoicing methods

A company can invoice freight rates to the external business partner, based on:

  • Freight Costs
  • Freight Costs (Update Allowed)
  • Client Rates
Freight Costs

Freight calculates the freight invoice amount based on the best information currently available (estimated freight costs). These freight costs are retrieved from a carrier rate book in Pricing and are updated every time a change is made to the shipment/load. Freight releases the freight invoice to Invoicing.

Freight Costs (update allowed)

Freight prorates the freight amount for the purchase order (estimated freight costs) based on the entire load in Freight. It occurs that, when Freight releases the freight invoice with the estimated freight costs to Invoicing, the invoice is sent before the actual costs are received from the carrier. In other words, first the estimated freight costs are determined, based on the carrier rate books as stored in Pricing. In a later stage, after the carrier invoice is received and matched in Accounts Payable, the actual costs can be entered. As a result, you can invoice your business partner the difference between the estimated costs and the actual costs.

Note

If you want to invoice your business partner with the difference, LN can generate an additional invoice. The invoice is based on the data you enter in the If amount greater than, or the If greater than field of the Freight Invoicing Parameters (fmfri0100m000) session.

Client Rates

If the invoicing method is Client Rates, the invoice amount is based on fixed agreements with customers about the freight rates that can be charged to them in order to be compensated for the freight costs that a company must pay to the carrier.

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