Freight on SAP Business One

Freight Costs or what we usually know in Indonesia as "transport costs" or "delivery costs" are expenses for moving goods from the seller's warehouse to the buyer's warehouse.

The costs included in this freight include shipping costs, import duties, shipping insurance costs both during purchase transactions and sales transactions.

There are 2 types of conditions for the delivery of goods in a trade transaction, including:

1. FOB (free on board) Shipping Point

The transportation costs (shipping costs) of merchandise from the seller's warehouse to the buyer's warehouse are the responsibility of the buyer of the goods. So that ownership of the goods has become the right of the buyer even though the goods are still at the seller's place. Even though at the time of closing the books in the buyer's accounting cycle, the goods have not been received, the goods must be recorded in the inventory account.

2. FOB (free on board) Destination Point

The transportation costs (shipping costs) of merchandise from the seller's warehouse to the buyer's warehouse are the responsibility of the seller, so that ownership of the goods becomes the buyer's right when they are received by the buyer. If at the end of the financial year the goods have not been received, then the value of the goods may not be included in the accounting records as inventory by the purchasing company in the year-end balance sheet.

How to Activate the Freight Feature on SAP Business One

First, open your SAP application then select Administration > System Initialization > Document Settings. Next, look at the "Manage Freight in Documents" section then the checklist to be able to activate Freight in Documents.

Second, after successfully doing this, when you make a sales or purchase transaction, freight costs will appear when creating the transaction document.

How to Set Up this Freight

First, select the Administration > System Initialization > Document Settings > General Tab. Next, click the "Freight – Set Up" section, until the layer display appears as follows.

Second, set the page with the following information:

·       Name : Fill in the name of the freight type

·       Revenue Account : Freight account used in sales documents

·       Expense Account : Freight account used in purchasing documents

·       Output Tax Group : Jtype of output tax in the Sales Document

·       Input Tax Group : Type of input tax on the Purchase Document

·       Fixed Amount – Revenues : Default Freight Value on Sales Document

·       Fixed Amount – Expenses : Default Freight Value on Purchase Document

·       Gross Freight : If you check this function, the tax will be included in the Freight value

·       Wtax Liable : Freight may be subject to Income Tax

·       Distribution Method : Freight value distribution method

a)    None : Freight is not distributed to line items on the document

b)    Quantity : Freight will be distributed following the Quantity proportion in each item line

c)    Volume : Freight will be distributed following the Volume proportion in each line item

d)    Weight : Freight will be distributed following the Weight proportion in each item line

e)    Equally : Freight will be distributed evenly across each item line

f)     Row Total : Freight will be distributed following the value proportion in each line item

·    Drawing Method : Method for retrieving the Freight value in a document when it is copied to the next document

a)    None : Freight is not taken from previous documents

b)  Quantity : Freight will be taken according to the Quantity Item copied to the Next Document

c)    Total : Freight will be taken according to the value copied to the next document

d)    All : Freight will all be taken to the Next Document

·     Stock : If checked, the Freight Value will increase the Inventory value

·  Last Purchase Price : If checked Freight Value will add to the last Purchase Price when the AP Invoice was created.

·   Distr. Rule : Determine the Distribution Rule that will be connected to the Freight value imposed on the Document

·     Project : Determines the specific Project that will be linked to the Freight value imposed on the Document

Third, complete the freight settings according to your needs. Then click Update

The following is an explanation of Freight in SAP Business One. Check out this interesting article about other features in SAP Business One. Stay Tuned