Manage Freight Charges in Purchasing Document

Today I will let you know about the Freight charges in Purchasing Document.

There are two scenarios that we can manage the freight charges on document and row level. First, the freight without inventory valuation and second is the freight with inventory valuation, if you manage perpetual inventory.

Here I explain them one by one.

Firstly we have to enable the Freight Set-up in Document Setting

Path: Administration--> Systems Initialiazation--> Document Setting--> General Tab

Check "Manage Freight in Documents" and once checked it, the Freight Setup button appeared.

Click on Freight Set-up button to define various freight charges and allocate the Freight GL under Revenue Account and Expense Account respectively.

Here I will explain about the Expense Account for purchasing document and without valuation inventory.

Allocate the Freight GL account under Expense Account as seen on screenshort below.

Now we create Goods Reciept PO with freight charges.

Goods Reciept PO in journal preview. No Journal Entry for freight is passed as the freight is without invetory valuation.

To create a A/P Invoice by using Copy From to select Goods Receipt PO.

After adding A/P Invoice, the Jounal Entry for Freight is passed.

Now we see the Freight with inventory valuation.

For this you need to check Stock/Fixed Asset in Freight Set-up as shown in below screenshot.

Select the Distribution Method  for distributing the freight amount among document rows.

Allocate the Expense Clearing Account GL in GL Account Determination.

Path: Adminstration-->Set-Up-->Financials-->G/L Determination-->G/L Determination in Inventory Tab.

Now we create Goods Reciept PO with Freight charges.

Goods Reciept PO in journal preview. GL account of Expenses Clearing Account is passed as the freight is with inventory valuation. Expenses Clearing Account  is on credit side which means Freight amount is load on Raw Material on debit side of that item.

To create a A/P Invoice by using Copy From to select Goods Receipt PO

After adding A/P Invoice, the Journal Entry of Expenses Clearing Account is on debit side to nullify this account.

 This is the process of Freight Set-up in SAP Business One, hope you like it. Thankyou to all.