The invoicing process

Organizations often arrange the transportation of the goods they sell to their customers. Often, they also arrange for the transportation of the goods they buy from their suppliers. In both cases, organizations usually subcontract the transportation of these goods to a carrier.

The organizations must pay the carrier for the transportation of the goods. To be compensated for the freight costs that they must pay to the carrier, organizations can send an invoice to the customer or the supplier. In Freight Invoicing, invoices can be created for external business partners. For internal business partners, freight invoices are created in the Intercompany Trade module. For more information, refer to Internal and external freight invoicing.

Most organizations have agreements with their customers and suppliers on how much they can charge for transportation: the full amount they had to pay to the carrier, some special rate, or no charge at all. In Freight, the amount for freight costs invoiced to the business partner is determined by the invoicing method defined for the business partner. For further information, see Invoicing methods.

Invoices for freight costs are based on freight orders. To create invoices, the invoicing information of these orders must be released to Invoicing. In Invoicing, the invoices are created and sent to the business partners.

To release sales and freight order information to Invoicing

The release of sales-order invoicing data can be carried out in Sales. When a sales invoice is released to Invoicing with the calculated amount on the sales order (detail) line, LN can release the freight invoice to Invoicing as well. Invoicing then combines the order invoice with the freight invoice and sends a single invoice.

For LN to release the freight invoice information together with the sales invoicing information, select the Include Freight Costs check box in the Release Sales Orders/Schedules to Invoicing (tdsls4247m000) session. Otherwise, you must release the freight information by means of the Release to Invoicing (fmfri0210m000) session or the Freight Invoicing Information (fmfri0110m000) session.

If a freight order has been generated for a sales order, the freight order can be released before the originating sales order. In such cases, Sales creates an invoice for the price of the goods sold, and Freight creates an invoice for the freight costs.

Note: You cannot release invoicing data directly for orders of other origins, but you can release invoicing information from the freight order that is created from the these orders. The reason for this is that no invoicing option exists for these orders.

Freight invoicing handled by Freight or Service

Freight invoicing can be handled by Freight or by Service.

If handled by Service, the invoicing status in the Freight Invoicing Information (fmfri0110m000) session is Not Applicable.

To release freight orders to Invoicing

For freight orders to be released to Invoicing, the status of the freight orders must at least be Shipped. This enables freight cost recalculation if the shipped quantity differs from the ordered quantity. For further information on freight cost recalculation, see Recalculate for Shipment Differences. In addition, freight orders with statuses lower than Shipped are more likely to be cancelled or changed, therefore, invoicing these types of orders can be pointless.

Freight orders can be released by batch in the Release to Invoicing (fmfri0210m000) session. Alternatively, you can release individual freight order lines to Invoicing in the Freight Invoicing Information (fmfri0110m000) session.

Invoicing based on Freight Costs or Client Rates

If invoicing is initiated from a freight order, you can release the freight order for invoicing when the status of the freight order is Shipped or higher than Shipped. A freight order receives the Shipped status:

After the loads and shipments created from the freight order have received the Shipped status.
The warehousing order related to the freight order has received the Shipped status.

Invoicing based on Freight Costs (update allowed)

If differences occur between the freight cost amount invoiced to the business partner and the transportation costs actually incurred, this invoicing method enables you to send another invoice to the business partner charging them with the difference.

Invoicing based on carrier invoice

If invoicing is based on a carrier invoice, you can charge the business partner with the difference between the freight-cost amount invoiced before the carrier invoice was known and the carrier invoice amount.

After the invoice of the carrier has been received and approved in the Accounts Payable module, LN passes on the actual freight costs from the carrier invoice to Freight and updates the shipments and loads or the freight order clusters with the actual freight costs. LN also updates the freight orders, from which the loads, shipments, or clusters originate, with the actual costs. For this purpose, the actual costs of the shipments and loads or clusters are divided among the freight orders on which the shipments and loads or clusters are based.

To specify that invoicing is based on a carrier invoice:

For loads, select the Carrier/LSP Invoice check box in the Loads (fmlbd4100m000) session.
For freight order clusters, select the Carrier/LSP Invoice check box in the Freight Order Clusters (fmfoc3100m000) session.

Invoicing based on estimated costs made final

If invoicing is not based on a carrier invoice, for example, because your organization performs goods transports itself, you can also invoice your business partner with updated transport cost amounts if, after you sent the transport cost invoice to the customer, the transport costs actually incurred turned out to be different from those invoiced.

To update freight costs if invoicing is not based on a carrier invoice, change the amounts on the shipments or clusters as needed and on the appropriate menu of either the Freight Order Clusters (fmfoc3100m000) session or the Loads (fmlbd4100m000) session, click Set Actual Cost--> Final. Note that this option is available if the status of the load or cluster is Completed. For more information, refer to Final.

To specify that invoicing is not based on a carrier invoice, in either the Freight Order Clusters (fmfoc3100m000) session or the Loads (fmlbd4100m000) session, clear the Carrier/LSP Invoice check box.

Release updated freight costs to Invoicing

After the user sets the estimated costs to Final, or after the freight costs are updated with the carrier invoice amount from the Accounts Payable module, you must release the updated freight costs to Invoicing, where the updated freight costs will be further processed and invoiced to the business partner.

In Invoicing, the actual costs are further processed and invoices are created and sent to the business partner.

Note:

Note that the updated actual costs are only released to Invoicing if the difference with any previously released freight costs is greater than the difference specified in the Freight Invoicing Parameters (fmfri0100m000) session. In the Freight Invoicing Parameters (fmfri0100m000) session, you can specify these margins in the If greater than field and the If amount greater than field.

If the invoicing methods Freight Costs and Freight Costs (Update Allowed) apply, internal business partners are always invoiced with the actual freight costs. Cost-plus and additional costs are two different concepts. Additional costs are extra services the carrier has carried out for which you must pay.

A mark-up on the carrier costs is added to the invoice if the Additional Percentage check box or the Additional Amount check box is selected in the Invoice-to Business Partner (tccom4112s000) session.