Invoicing methods

The following invoicing methods can be used to determine the amount invoiced to business partners for freight charges:

  • Freight Costs

    Freight costs are transportation costs based on the carrier rates maintained in Pricing and the most recent information available on the quantities, volumes, and/or weights of the goods that are prepared for transportation, that are being transported, or that actually have been transported. The height of the freight cost amount invoiced to the business partner depends on the moment the freight cost calculation is carried out.

    If the freight costs are calculated before goods are prepared for transportation, the freight costs are based on the total ordered quantity, weight, and/or volume of the goods that must be transported. During loading, transportation or transfer, changes can be made to these quantities, weights or volumes due to damage to the goods, insufficient transport capacity, and so on.

    If freight costs are calculated during any of these stages of the transportation cycle, the amount can differ from the freight cost amount calculated before transportation took place. If the freight costs are calculated after transportation has taken place, the freight cost amount is equal to the actual freight costs made. This is the amount that the carrier will charge for transport services.

  • Freight Costs (Update Allowed)

    The freight costs are based on the carrier rates maintained in Pricing, which is the same as for the Freight Costs invoicing method.

    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 him with the difference.

    The following scenarios exist in which the business partner can be invoiced with updated transport costs:

    • Invoicing based on carrier invoice

      If the freight costs have been calculated and invoiced to the customer before the invoice from the carrier has been received, and the amount invoiced to the customer differs from the amount of the carrier invoice, you can charge the customer with the difference.

    • Invoicing based on estimated costs made final

      If the freight costs have been calculated and invoiced to the customer before the actually incurred freight costs are known, and the amount invoiced to the customer differs from the actually incurred amount, you can charge the customer with the difference.

    Whether you can invoice the business partner for the difference between the invoiced transport costs and the transport costs actually incurred, is controlled by parameter settings: if the difference is greater than a given percentage and amount, the customer is invoiced with the difference. You can set these parameters in the If greater than field and the If amount greater than field of the Freight Invoicing Parameters (fmfri0100m000) session.

  • Client Rates

    Client rates are freight rates agreed on with an organization's business partners. These rates are maintained in the client freight rate books in Pricing.

  • Not Applicable

    No invoicing.

Note: 
  • For the invoicing methods Freight Costs and Freight Costs (Update Allowed), the actual and estimated freight cost can be augmented with costs-plus. Cost-plus means that you place a mark-up on the carrier costs to reach the amount with which you invoice the business partner.

  • In the Invoice-to Business Partner (tccom4112s000) session, you can define the following fields if you want LN 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.
  • Cost-plus and additional costs are two different concepts. Additional costs are extra services the carrier has carried out for which you must pay.
  • The invoicing methods, with or without costs-plus, can be specified on business-partner level in the Invoice-to Business Partner (tccom4112s000) session and in the Sold-to Business Partner (tccom4110s000) session. You can also select these options in individual sales orders, purchase orders, and freight order lines. For freight order lines, these options are available in the Freight Invoicing Information (fmfri0110m000) session. In this way, you can overrule the settings made at business-partner level for individual orders.
  • For internal business partners, freight invoices are created in the Intercompany Trade module. For more information, refer to Internal and external freight invoicing.