Freight condition in PO

[lawrei99]

Hello ,

I have the below requirnment .

For a drop ship scenario ( no GR  )  when supplying vendor sends the Invoice , following accounting entry should hit

Gross price of PO : 100

Freight : 10 ( 10% ) 

Dr.  cost of sales for 100.00 for the po price of the item.

Dr. cost of sales for 10 for the freight that will be charged to us by freight vendor ( 10% of Gross price )

Cr Supplying vendor for 100.00

Cr FR/IR for 10.00 . ( right now the freight amount also adds to the vendor account )

& when freight vendor sends the invoice ,

Dr. FR/IR for 10.00

Cr freight vendor/AP for 10.00

As we want the amount is  Accrual  , FI will reconcile the Freight account monthly or quarterly.FRA1 is maintained with FR1 accural key . 

Logic is that when Supplying vendor sends the Invoice , they will bill to customer with freight charges but they will pay to Supplying vendor only with 100.00 and the freight amount of 10 should go to Freight vendor.

Please let me know the possibility and how this can be acheived.

Regards,

Lawrei

[Former Member]

HI Lawrei,

As I already told you in the previous post, if you have maintained the Freight Condition FRA1 with a Freight Vendor, then you can separately pay the Vendor for Freight Charges with Allocation only being made to Planned Delivery Costs in the MIRO transaction.

Now if you want this to be fetched each time you create a new Purchase Order, then maintain the condition in the Purchase Info Record as I already told you. It will server this purpose extensively.

/Manoj

[lawrei99]

Hello All ,

I have understood the process of paying the Freight vendor by maintaining the Freight vendor thru conditions.

But if you see my question above , its more on accounting entries and how it should hit.

I know with doing MIRO separately ( supplying vendor + freight vendor )  following accounts will come up

Dr.  cost of sales for 100.00 for the po price of the item.

Cr Supplying vendor for 100.00  &

Dr. cost of sales for 10 for the freight

Cr freight vendor/AP for 10.00

And if I do with Goods services / Planned cost , then

Dr.  cost of sales for 100.00 for the po price of the item.

Dr. cost of sales for 10 for the freight that will be charged to us by freight vendor ( 10% of Gross price )

Cr Supplying vendor for 110.00

But what we actually want is

Dr.  cost of sales for 100.00 for the po price of the item.

Dr. cost of sales for 10 for the freight that will be charged to us by freight vendor ( 10% of Gross price )

Cr Supplying vendor for 100.00

Cr FR/IR for 10.00 .

And when freight vendor comes in , then

Dr. FR/IR for 10.00

Cr freight vendor/AP for 10.00.

The idea is that we do not want to pay the supplying vendor the freight   , but we also hit the Freight G/L account during this Invoice so that FI teams know how much its to be paid as we will not put into the Freight Invoice immediately and that may happen monthly or quarterly . And when we receive the Freight Invoice ( which will be for multiple PO Invoices ) , FI team will then post the Invoice and should have following effect

Dr. FR/IR for $$$$.$$

Cr freight vendor/AP for  $$$$$.$$ .

I want to know is this possible process we can achieve and how to do that .

Regards,

Lawrei

[lawrei99]

With a drop ship process , as there is no GR and direct Invoice , I would like to know the Freight G/L account works .

Regards,

Lawrei

[Former Member]

Hi,

In the Po maintain different vendor code  for the freight vendor  so that your requirement is met.

In the po you can maintain the different vendor vode for the freight vendor by  selecting the freight condition type and click the details which will navigate to another screen where you input the vendor code.

This vendor code input option is available based on your freight condition.

After doing all the above, do the GR.

After Gr, do MIRO for the main vendor  by selecting the option as goods services items so that you pay only 100 rs to the main vendor.

For the freight vendor , choose the option as Planned delivery cost so that only 10rs paid to the freight vendor.

Regards,

Velu

[lawrei99]

Hello Raj ,

If you see above my comments , I do not issue with how the freight charges can be planned separately , but its more about how I want to hit the accounting entries .

I want to hit the freight account when first invoice comes ( supplying vendor ) without doing GR.

I don't think this is achieved by standard settings, but I would like to know if this is possible.

Regards ,

Lawrence Fernandes