Freight Application

Define multiple freight rules. Freight auto-computed and its costs auto-distributed

Freight Management & application of Freight Terms

BusinessAhead enables you to manage freight so that you can track any additional costs in sales and purchase transactions. Freight charges could include insurance, shipment, handling, port charges, and other costs that have to be accounted for.

Freight can comprise a significant inventory-related cost. The importance of considering this cost in any business transaction cannot be overstated. The globalization of commerce, rising energy costs, and the increasing use of overnight delivery via more expensive air transportation vehicles all contribute to high freight costs. Freight costs can easily exceed 10% of the value of a transaction. As a result, sales transactions relate not only to matters of product cost, but must also include consideration of freight terms. Freight terms are often described by abbreviations that describe the place of delivery, when the risk of loss shifts from the seller to the buyer, and who is to be responsible for the cost of shipping.

BusinessAhead allows you to apply freight terms to both sales and purchasing documents. The freight and associated charges in purchasing documents may affect item cost and the last purchase price. The charges are calculated for the sales/purchase document as per the configured Calculation Method for various freight components. The charges can be affected by how many products have been ordered, how much they weigh, as well as any other configuration settings.

When preparing a sale/purchase document, depending upon the Freight Terms you select, the associated costs are automatically calculated and loaded. You have the option to edit them in the sale/purchase document.

The Freight Terms that you define are applicable both when you ship goods to your customer through a Sales document, as well as when you receive goods from your vendor through a Purchase document. The roles switch, and BusinessAhead automatically assigns responsibility for bearing various freight related charges depending upon whether in a particular document, you are playing the role of a buyer (consignee) or a seller (consignor).

Setting up Freight Terms enables you to:

  1. Compute the freight on item sale/purchase.
  2. Plan shipments and prepare shipment manifests.

Freight & related Cost Components

BusinessAhead allows you to pre-define all relevant cost components associated with shipping and handling during delivery of goods. These cost components can then be used to setup various freight terms that you may be exercising in your business for sale and purchase of goods.

A cost component may be subject to tax. BusinessAhead allows you to specify the associated tax group for such cost components.

Accounting of cost components

Cost components are accounted for in an expense account both in case of Freight-in as well as Freight-out. Separate expense accounts for Sales and Purchases are not maintained. This account is Debited when the expense increases and Credited when the expense decreases. You have the flexibility to account for all expenses due to freight in a single expense account or maintain separate account ledger for each type of cost component.