Allocating Freight Costs by Item for Outbound Transactions
When you run the Freight Update and Report program (R4981), the system writes journal entries to the general ledger based on these automatic accounting instructions (AAIs):
AAI |
Description |
|---|---|
Freight cost (4920) |
Payable freight charges |
Revenue (4230) |
Billable freight charges |
During freight update, the system creates the journal entries for payable charges, such as accrued liabilities and freight costs, at the charge code level. The system defines charges in rate setup based on the general ledger class code in the JD Edwards EnterpriseOne Accounts Payable system and the general ledger. Journal entries that are based on the general ledger class code can contain multiple types of charges. For example, in the freight cost AAI, you might have journal entries for multiple charges such as line haul and miscellaneous charges.
If the setup on the Carrier Master (P4906) includes the Auto Pay option, the system creates payable general ledger entries and accounts payable entries for the voucher. If the setup does not include the Auto Pay option, the system creates only general ledger entries.
If you defined charge codes to allocate freight, the system records payable freight charges directly in the freight-cost general ledger entries. The system records multiple freight cost entries in the general ledger for each sales detail line on the shipment. For billable freight charges, the system summarizes and records the charges to the sales order in the shipment as nonstock lines (F line type).
When you run Sales Update (R42800), the system records the revenue entries in the JD Edwards EnterpriseOne Accounts Receivable system and in the general ledger from sales detail lines. For the detail lines for allocated freight, the system updates the detail lines on the original order with the allocated freight charges.
The system calculates and updates freight revenue allocations in the Sales Order Detail File - Tag File table (F49211) and the Sales Order Detail File table (F4211) using the Revenue Allocations AAI, 4231.
This example illustrates three lines on a sales order:
Line # |
Item / Quantity |
Line Type |
General Ledger Class |
Charge |
|---|---|---|---|---|
1.0 |
Item A/20 |
S |
IN30 |
200.00 |
2.0 |
Item B/30 |
S |
IN30 |
300.00 |
3.0 |
Item C/50 |
S |
IN31 |
500.00 |
For simplicity in this example, all items are assumed to weigh the same.
After you run the Freight Update and Report program (R4981), the system writes the charges to the sales orders as Freight (F) line types. This example illustrates:
Freight All that is allocated to each item on the order.
Freight S that is charged to the entire order.
Line #
Item/ Quantity
Line Type
General Ledger Class
Charge
Allocated Freight
1.0
Item A / 20
S
IN30
200.00
2.00
2.0
Item B / 30
S
IN30
300.00
3.00
3.0
Item C / 50
S
IN31
500.00
5.00
4.0
Freight All
F
FT10
10.00
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5.0
Freight S
F
FT20
7.50
blank
blank
Total
blank
blank
1017.50
10.00
To allocate the freight to each item, the system completes these calculations:
Determines the proportion due each line.
In the preceding example, line 1 is 20 percent of the quantity that was ordered, so the allocated freight is 2.00 or 20 percent of line 4. Line 2 is 30 percent of the quantity ordered, so the allocated freight is 3.00 or 30 percent of line 4. Line 3 is 50 percent of the quantity ordered, so the allocated freight is 5.00 or 50 percent of line 4.
Divides the allocated freight for the line by the number of items ordered.
In the preceding example, each item has a freight allocation of.10.
During Sales Update (R42800), the system creates revenue entries in the JD Edwards EnterpriseOne Accounts Receivable system and the general ledger.