Explaining the Freight Settlement Process

After completing this lesson, you will be able to:

After completing this lesson, you will be able to:

  • Process and settle freight charges
  • Confirm freight costs for accrual posting

Freight Settlement Process

Freight costs calculated for the freight documents (freight orders and freight bookings) are to be posted in financial accounting to record such costs in accounting as accruals and to pay the carriers or freight forwarders. Once the freight documents are in a status in which the transportation has been initiated or completed, the freight costs can be posted to financial accounting. A user with role Transportation Buyer is responsible for this process from a transportation perspective. On the financial side, a user with role Accounts Payable Accountant concludes the process.

The freight settlement process (scope item 6W4) consists of four process steps.

In the first process step, the transportation buyer is responsible to confirm the freight document (freight order or freight booking) for accruals posting. They afterwards monitor the freight documents for any posting errors. The accounts payable accountant is responsible for the remaining two steps, that is the carrier settlement and the posting of the invoice.

It is also possible to automate the confirmation and posting of freight costs. You can use a combination of carrier/service provider, procuring company code and purchasing organization to set-up the automation of the confirmation and the posting of freight costs. When a freight document matches the defined condition, the system automatically confirms and posts the freight costs for the freight document. The corresponding condition with type /SCMTMS/TOR_FRC_CONF is defined in the Manage Conditions app.

Confirmation of Freight Costs for Accrual Posting

Charge Calculation in Freight Documents

The system calculates transportation charges for freight orders when you transfer the freight orders from a decentral transportation management system to Transportation Management (TM) in SAP S/4HANA Cloud Public Edition. The system calculates the charges even if the charges were previously calculated in the decentral transportation management system before the transfer. Charges calculated before transferring the freight orders to TM aren't transferred to TM. The system recalculates transportation charges whenever a freight order is updated.

Charge calculation is based on released freight agreements, which have been explained in the learning unit on master data along with the basic principles of charge calculation.

However, there may be situations, in which calculated changes are wrong and have to be changed. Therefore, unplanned freight charges can be added or calculated charges can be changed in freight orders or freight bookings using the Manage Freight Orders app or Manage Air/Ocean Freight Bookings apps. If freight orders originate from an external system, charges can also be changed there. It is allowed to add unplanned freight charges or edit charges even after the system has initiated the settlement process. However, you can add only charge types relevant for the transportation mode and shipping type of the freight order or freight booking. Note that, once the system verifies the invoice for the freight order or freight booking, it is no longer allowed to add or edit any charge lines.

In case of external transportation planning (scope item 6W1) it is possible to add unplanned charges or edit charges from the external system until the execution status of the freight order is In Process. Once the execution status of the freight order is In Execution, you can only add or edit charges directly in the SAP S/4HANA Cloud Public Edition. In this case, the leading system switches from the external system to SAP S/4HANA Cloud Public Edition.

With the Monitor Calculation Errors - Freight Documents app, you can monitor freight documents (road freight orders, rail freight orders, ocean freight bookings, and air freight bookings) that have calculation errors. You can also calculate the charges to help analyze the errors. Then you can navigate to the relevant app to resolve the errors so that the freight documents can be included in financial postings.

Confirm Freight Documents for Accruals Posting

When the transportation process has been physically executed, the financial part of the process needs to be triggered. In the Monitor Execution – Freight Orders app, you have checked out freight orders, which is a prerequisite for financial processing. After you have checked out the last or only pickup stop of the freight order, the system gives the freight order a posting status of Ready for Confirmation. When your freight orders are in this posting status, you can verify that the planned (calculated) costs are correct, and you can confirm the transportation cost for posting to Financial Accounting. Likewise the Ready for Confirmation status is set for ocean freight bookings based on status Shipped-On-Board and for air freight bookings with status Uplift Confirmed.

The transportation buyer is responsible to post the freight document, but he can also cancel posting of accruals which returns the freight document to the posting status Ready for Confirmation. The posting status in a freight order or freight booking tells you the status of the posting of accruals and invoice verification. Initially, the posting status is Not Ready for Posting. When your freight orders are at the posting status Ready for Confirmation and you've verified that the planned costs are correct, you can confirm the transportation charges for posting to Financial Accounting. The following posting statuses are available:

  • Not Ready for Posting

    The system can’t use the transportation charges for confirming freight costs and posting to Financial Accounting.

  • Ready for Confirmation

    The system has confirmed the transportation charges and posts the charges to Financial Accounting.

  • Posted

    The system has successfully posted the transportation charges to Financial Accounting.

  • Posting Failed

    The system can’t post the transportation charges because of some errors.

  • Invoice Verified

    The system has received the invoice and have verified the invoice with the transportation charges.

The posting date is the date that the system posts the transportation charges to Financial Accounting.

After confirming the freight order for accruals posting, the Purchase Order and Service Entry Sheet are created automatically. These documents are the basis for invoice verification. Two scenarios are possible after choosing Confirm for Posting and they are as follows:

  • The freight order is confirmed for posting successfully.
  • The posting result is an error. In this case, the message Posting of Freight Order <Freight Order Number> has failed appears. You can find the freight order, which failed to be posted in the Errors list. The Freight Order was failed to confirm dialog box appears and you can review the detailed page with the error page header. You can check the error messages by choosing Show Errors on the overview page or on the detailed page.

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