Capability of billing freight cost to customer in Embedded Transportation management in S/4HANA 1909 release

[Mrinal_K_Roy]

Freight is an important cost component in today’s supply chain and in most cases seller (or manufacturer) wants to bill the freight cost to the customer. SAP ECC Shipment cost functionality supports the inclusion of freight cost in customer billing document, however there was no such functionality with freight cost calculated in embedded Transportation Management ( TM ) till S/4HANA 1909 release. SAP has now provided the functionality of including freight cost in customer (SD) billing document in embedded TM in S/4HANA 1909 release, thereby eliminating the complex custom development to achieve the same.My present blog is to describe this new feature in embedded TM and the important configuration to achieve this functionality.

A typical Order to cash flow with embedded TM in S/4HANA is shown in below image. Freight charge is calculated in Freight order (FO) based the Freight agreement with carrier and relevant cost parameters.

Now from S/4HANA 1909 release, it is possible to include the freight cost (say for example 125 Euro) in the customer billing document . Below images (1) shows that a FO 6100001003 is created from an outbound delivery 80001147, image (2) shows the freight cost of 125 Euro has been calculated in FO 6100001003 and the same appears in billing document 90000033 in image (3).

The above scenario shows that the FO has a single delivery which may not be a practical scenario. A freight order generally has multiple deliveries and the industry wants the freight cost from FO to be distributed to the individual billing documents based on the distribution parameters (like weight, volume etc). Standard SAP S/4HANA 1909 release also supports the same. Below image (4) shows the Freight order has 2 deliveries with freight cost as 360 Euro.

Below images (5) and (6) show that the freight cost of 360 Euro has been distributed to the relevant billing documents into 120 Euro and 240 Euro (depending on the weight as a distribution parameter considered for the relevant deliveries).

Now, the most important configurations for billing of TM freight cost to customer billing document have been captured in below images

• Freight cost condition type with Condition function FCTM (Freight costs from TM)

A freight cost condition type with Condition function as FCM is required to capture the freight cost from TM and that condition type should be assigned to the relevant pricing procedure.

• Freight order as pricing source in copy control

The ‘Price source’ in copy control from delivery document to billing document shall be I (Order / Freight order) in VTFL.

Some sellers / manufacturer’s also may want to add some margin on freight cost in the billing document which is also very much possible with SAP standard SD customizing with pricing procedure.

In my view, this possibility of billing freight cost from TM to customer billing document is one of the most wanted capability in most of the customers and a great step towards feature parity in embedded TM with SAP ECC LE-TRA.

This blog is based on my personal  tests / observations. Will appreciate your views / comments / feedback.

[former_member674344]

Hi Mrinal,

 

It is really nicely explained and useful for the consultants.

 

Regards

Shalabh Rastogi

[hetal_parikh3]

Hi Mrinal,

 

thank you for this blog, very helpful.

Your example is based on IM managed storage location, will billing freight cost to customer work for EWM managed storage location.

regards,

Hetal Parikh

[sdonaire55]

Great article, thank you very much. Best Regards.

[Mrinal_K_Roy]

Hi Hetal,

Thanks .

Yes, this blog is based on test result with IM Storgae location. Will test with EWM storage location and update .

With regards,

Mrinal

[Mrinal_K_Roy]

Hi Hetal,

I tested with EWM managed storage location and this billing functionality also works for delivery with EWM warehouse (storage location).

Regards,

Mrinal

[amritabose1]

Hello Mrinal,

Thanks for this again.

I have done the configuration for new condition type and included it in the Billing price determination.

I have also done the VTFL setting as mentioned. The freight cost is calculated and saved in the Freight order

I wanted to know ,is the Freight cost calculated in the Freight order is automatically transferred when the billing document is generated? or any other setting is required besides the one I mention above to map the freight cost to the freight condition type assigned in the pricing procedure?

Regards

Amrita

[amritabose1]

hi Mrinal,

Just to add to the above,

I have created the special pricing condition, assigned it to the pricing procedure for billing.While billing this condition is determined, but with no value.

I have done the config for VTFL. Freight order has the charge calculated, but when I try to invoice the delivery related to the freight order, the pricing condition does not pull value from the freight order.

Am I missing something?

Regards

Amrita

[Mrinal_K_Roy]

Hi Amrita,

Condition type should have the condition function as FCTM . I have updated the blog with the screenshot of the condition type.

Regards,

Mrinal

[amritabose1]

Many Thanks Mrinal.

I had already set this up. I had not set the condition type as manual condition in the pricing procedure.I set it up now and the freight cost was copied to the billing document.

Many thanks for such good documentation on the 1909 special feature.

Regards

Amrita

[former_member683847]

Hi Mrinal,

Thanks for the blog.

can we transfer the freight cost to sales order document. if the planning has been based on order.

Thanks & Regards

Karthi

[Mrinal_K_Roy]

Hi Karthi,

Freight cost (from TM) is transferred to billing document as per present 1909 release. Generally, freights are planned in sales order based certain parameters through condition record.

Regards,

Mrinal

[former_member690817]

Hi Mrinal,

 

"depending on the weight as a distribution parameter considered for the relevant deliveries"--Where do we define the distribution parameter for deliveries? By default, I think the distribution parameter considered is weight in the order. If say, for example, we need to change the parameter to volume in the order, where do we set that?

Thanks for the explanation.

Akshat

[Mrinal_K_Roy]

Hi Akshat,

Distribution parameter (or rule) is defined in Cost distribution profile as in below image. Volume can also be defined as Distrubution rule , if required.

With regards,

Mrinal

[SteveHill]

This is great functionality - is it available for Inbound Freight too - Purchase Order pricing conditions?

[former_member619068]

Hi Mrinal,

Thanks for the blog.

Is the same functionality available for Purchase (Inbound Freight Scenario), where transportation costs can be included in Supplier Invoice as well?

 

[Former Member]

HI Mrinal.

Thanks for the Blog.

May i know if the freight cost which transferred from TM to ECC billing sum up Freight order (Pre carriage)  + Freight Booking (On carriage) charges in case Export scenario.

 

Regards,

Gautam S

[Mrinal_K_Roy]

Hi Steven,

I am thinking first from business perspective. Inbound transporation will be relevant if the purchasing company takes care of transportation , then logically inbound freight cost should npot be paid to the vendor.

With regards,

Mrinal

[Sean_House]

Very nice Blog and extremely helpful.  I am late to asking but hopefully you will still receive this question.  I did wonder though if it is possible to map charges to separate condition types to give visibility to the components of the freight cost? So for example:

I think in your example this would map as a ZTMF with condition value $8,580.00 USD... but if I wanted to explicitly map the component charges ZFUE = $403.10, ZFRK = $50, ZLDF = $20, ZULF = #30, ZPCK = $15 to allow for breakout on the customer invoice and the possibility of posting to different GL accounts, do you have any suggestions on how that could be accomplished?   I suppose we could create a series of VOFM routines that read the Freight Order and adjust the condition value but that defeats the whole elegance of this solution. Any other thoughts on how it might be accomplished?

[former_member682276]

HI Mrinal,

Thanks for the Blog.

How do we capture the Freight Cost from the Side CAR TM(it is not Embedded TM) into SAP S4 HANA Billing document?

 

Regards,

Murali

 

 

[former_member798091]

Hi Mrinal,

I have gone through the process and configuration and did the same in my project system but somehow Freight Cost not getting determine in the Billing. Please help me the missing point in the configuration. I have determine the Condition Type ZTMF at sales order level without any check (Manual/Mandatory/Statistics) and routine in the pricing procedure.

Configuration

 

Process flow

[Mrinal_K_Roy]

Hi Ajit,

Suggest you to flag 'Manual' also in the pricing procedure for the cond type ZTMF.

With regards,

Mrinal

[Mrinal_K_Roy]

Hi Murali,

Functionality described in thsi blog is only for embedded TM.

With regards,

Mrinal

[former_member798091]

Thanks Mrinal,

Working fine..

Any possibility to get the condition wise(Charge type specific) freight charges flow in sales invoice.

[sp_a]

Hi Mrinal,

Thank you for this article. But i have one question during posting accruals, will the accruals be posted twice - one during customer side and other after posting Freight Settlement document?

Regards,

Aravi

[former_member847728]

Hi,

Thanks for a great post.

Which options do we have to prevent creation of a billing document if no charges at the freight order is not yet calculated? In cases where we need to invoice the customer the freight cost. Here you only get an warning and it is possible to continue and save the billing document.

Compared to ECC and LE-TRA function when we get an error and the processing of the billing document is stopped.

Thank you.

/Gr3g

[kalyan-barla]

Hello Sean,

 

I am facing the exact problem.  Could you please share if this was possible via standard solution?  or is there any alternative?

 

Regards,

Kalyan

 

 

[SK24]

Hi former_member798091, 

Check below configuration settings..

1) Distribution profile; SPRO > TRANSPORTATION MANAGEMENT > BASIC FUNCTIONS > COST DISTRIBUTION > DEFINE COST DISTRIBUTION PROFILES

Select Distribution rule and Distribution level

2) If your Problem Charge types not posted to Billing document - Freight condition type. Try this also. 

SPRO > TRANSPORTATION MANAGEMENT > SETTLEMENT > FREIGHT SETTLEMENT > INTEGRATION FOR SETTLEMENT POSTING > MAPPING FOR COST DISTRIBUTION > ASSIGN TRANSPORTATION CHARGE TYPES TO CONDITION TYPES

In the Sales condition types Column ASSIGN your Freight condition type to Charge types. 

3) Your freight order OR Freight settlement document should be relevant for Cost distribution.

SPRO - Transportation Management - Settlement - Freight settlement - Define Freight settlement document types

Regards

[daudasso]

Hi,

we are in a delivery-based planning scenario. My question is: do we have to activate pricing in Delivery documents, or it is enough to have it on Sales Order and Billing Document to get this integration working?

Thank you,

Dani

[SK24]

Hi Dani, 

If your Transaction flow is Sale order - Delivery - Billing?

As you said Planning will happen in Delivery document, it means TM TAB  you will get in the Delivery document as per configuration. 

So Pricing will fetch from Sale order to Billing  document. 

If my answer is not correct solution, Please revert back. 

@ALL, If I am wrong please correct me. 

Regards

[daudasso]

Thank you SK24, but the answer is not totally clear for me. Are you confirming that it is not necessary to activate pricing on Deliveries? Is it enough to have it on Sales Order and Billing Document?

Thank you,
Daniele

[Ronald_Knienieder]

We have batch split items in our outbound delivery, but we do the billing only on main item level.

Delivery:

Main item 10: 0 KG
Batch split 900001: 10 KG
Batch split 900002: 10 KG

Billing document:

Main item 10: 20 KG

With this scenario, TM does not pass the freight costs to SD billing document because we see that the cost distribution is based on the batch split item. For main item 10, there are only 0 kg.

Did anyone face this already?