Applying Freight Costs

///Applying Freight Costs
Applying Freight Costs 2017-09-11T03:59:25+00:00

Info and Concepts

Freight costs are incurred from shipment of purchased items from supplier to hangar.  The apply freight tool allows the user to enter shipping details of the freight but more importantly apportion the total freight cost of the purchase into each line item as required. Once the freight costs have been apportioned to each line item the user then has 2 options to apply the freight depending on who pays the freight:

1.   Apply freight to the purchase (ie. Supplier has charged freight on their invoice). Using this option will:

  • Build that freight cost per line item into the cost of the part.
  • This will increase the cost of the part in the line item.
  • This will therefore increase the line total.
  • This will therefore increase the purchase total.
  • Note that building the freight cost into the part directly will increase the value of the batch and therefore increase your inventory value.
  • As these batches are issued to jobs the freight costs are already incorporated in the batch cost.

2.   Apply freight to batches (GRN’s) (ie. Your company has paid the freight on a separate account.). Using this option to apply the costs will:

  • Write into each batch (GRN) record the full shipping details including freight costs.
  • This will not affect the purchase line item cost, line totals, or purchase total.
  • This will not affect the batch value and therefore not affect inventory valuations.
  • As batches are issued to jobs they will be assigned their normal costs (without freight)

As we now know the freight costs apportioned to each batch if using option 2. Above then we have a new report ‘Freight Costs per Job’ to report all freight costs for each batch (GRN ) issued to the job. This report shows the freight costs and shipping details with a grand total for that Job #.

The apply freight tool has its own status: ‘Not Applied’, ‘Applied to purchase’, ‘Applied to Batches’ as you process the freight the status will be changed to match your choice. The benefit of this is:

  • The user can see if the freight has been applied or not
  • Prevents the user from accidentally applying twice

You can only apply freight to a ‘Bill’ not an ‘Order’

Where

Purchases > Purchase detail form > ‘Apply Freight’ button

Walkthrough

  1. Click the ‘Apply Freight’ button
  2. A window will appear onscreen with the apply freight tool. The line items in this window are identical to the underlying purchase.Screen Shot 2016-02-22 at 12.25.23 PMScreen Shot 2016-05-09 at 8.57.27 AMScreen Shot 2016-02-22 at 12.25.23 PM
  3. Enter the shipment details in the header fields at the top of the window (most importantly the ‘Cost Total’)
  4. Enter to each line item the freight costs you want to apply to that line in the column to the far right
  5. As you enter these costs you will note the ‘ Cost Remaining’ total at the bottom of the table decrease by the total amount of freight applied to all lines.Screen Shot 2016-02-22 at 12.25.23 PMScreen Shot 2016-05-09 at 9.06.18 AMScreen Shot 2016-02-22 at 12.25.23 PM
  6. You must apply all freight to line items before selecting either of the 2 apply options.

Applying Freight to the Purchase

  1. Selecting this option will show a dialog explaining the functionality and result. Click OK to continueScreen Shot 2016-02-22 at 12.25.23 PMScreen Shot 2016-05-09 at 9.12.15 AMScreen Shot 2016-02-22 at 12.25.23 PM
  2. This process has now changed the value of the PO to include the cost of the freight. The cost of each individual item has been increased by the cost of the freight.Screen Shot 2016-02-22 at 12.25.23 PMScreen Shot 2016-05-09 at 9.15.13 AMScreen Shot 2016-02-22 at 12.25.23 PMThe cost of each Rod End has risen $75.00 from $2554.00 to $2629.00, the cost of each Anti-Collision Beacon has risen $7.50 per unit from $970.00 to $977.50. The $30.00 freight for the beacons has been broken down and applied to each individual item.
  3. When these parts are applied to a job or sold directly to a customer the new cost price will be marked up therefore recouping the cost of the freight.

Applying Freight to Batches

  1. Selecting this option will show a dialog explaining the functionality and result. Click OK to continue.Screen Shot 2016-02-22 at 12.25.23 PMScreen Shot 2016-05-09 at 9.29.55 AMScreen Shot 2016-02-22 at 12.25.23 PM
  2. To see the result of this function open the batch (GRN) window of any of the line items you have applied freight to. You will see details written in the new freight details section.Screen Shot 2016-02-22 at 12.25.23 PMScreen Shot 2016-05-09 at 9.34.01 AMScreen Shot 2016-02-22 at 12.25.23 PM

Calculating Freight Costs on a Job.

The freight cost for each item is now stored with the Batch Info and as these parts are assigned to jobs or sold on a parts invoice the total freight for the transaction can be calculated and added to total.

  1. Within the Parts Cost v Charge screen on a job click the “Calculate Freight” button.
  2. This will then show the calculated freight cost of all the parts on that job that have had a freight cost assigned to the batch.Screen Shot 2016-02-22 at 12.25.23 PMScreen Shot 2016-05-09 at 10.39.12 AMScreen Shot 2016-02-22 at 12.25.23 PM
  3. Alternatively you can run the “Freight Costs per Job” report from the report centre. This report will show a line by line breakdown of the fright costs as well as the total for the job.Screen Shot 2016-02-22 at 12.25.23 PMScreen Shot 2016-05-09 at 10.36.24 AMScreen Shot 2016-02-22 at 12.25.23 PM
  4. To recoup the cost of the freight add a new line to the job from the Parts Used tab using a Non-Inventory item code of “Freight” or similar.Screen Shot 2016-02-22 at 12.25.23 PMScreen Shot 2016-05-09 at 10.40.43 AMScreen Shot 2016-02-22 at 12.25.23 PM

Calculating Freight Costs on a Parts Invoice

  1. After the parts have been added to the Parts Invoice click the “Calculate Freight” button in the functions section.Screen Shot 2016-02-22 at 12.25.23 PMScreen Shot 2016-05-09 at 10.44.47 AMScreen Shot 2016-02-22 at 12.25.23 PM
  2. Add a new line to the sale using a Non-Inventory code of “Freight” or similar to recoup the cost of the freight for those items.Screen Shot 2016-02-22 at 12.25.23 PMScreen Shot 2016-05-09 at 11.53.06 AMScreen Shot 2016-02-22 at 12.25.23 PM

Tips

You can also still apply freight to a locked purchase but only to apply the freight to batches not to the purchase. This allows the user to apply freight costs to batches well after the purchase has been received but has only just received freight invoices (as these typically arrive weekly/monthly).