Freight conditions and invoicing

[cooladas_sal]

Hello gents,

My question is relevant to the management of freight costs. Yearly contracts are created for transportation of goods with some criteria (country, material etc.). A freight condition will be used in Purchase Orders. The questions are:

1. How will the transporter now which P.O number to reference in his invoice when the goods are shipped from the vendor?
2. How can the business know when creating a P.O that a transport contract already exists?
3. How can this freight contract be monitored? i.e.the number of Purchase Orders that the freight condition has the vendor from which the freight contract exists. How to monitor the progress of the freight contract?

Thank you

[JL23 · Accepted solution]

• How will the transporter now which P.O number to reference in his invoice when the goods are shipped from the vendor?

Based on your communication to the transporter, in the most simple process you send him a copy of the purchase order and tell him to go, take the goods and bring it into our plant.

• How can the business know when creating a P.O that a transport contract already exists?

Hopefully you have just one contract with a carrier for a year. Can there be transports that do not fall under the contract and would need to be negotiated separately?

Do you have the luxury to choose a carrier based on the contract price? This would require that you are able to calculate the rate up front and compare it with the rates of other carriers, but you usually create such yearly contracts to avoid this individual calculation and selection process.

• How can this freight contract be monitored? i.e.the number of Purchase Orders that the freight condition has the vendor from which the freight contract exists. How to monitor the progress of the freight contract?

Not really convenient possible. You never do a formal call off against such contract, you just maintain the freight rates in condition records that are then included into your purchase order pricing schema. If you are able to enter a reference when you enter the freight bill in MIRO then it might give you an option to do the analysis from accounting documents.

If you really want to have an integrated process with better options then you have to consider to use transportation with shipment documents and shipment costs  by  turning the process of invoice verification with ERS and giving credit notes to your carrier instead of receiving his bills.

http://www.sdn.sap.com/irj/scn/go/portal/prtroot/docs/library/uuid/70fbd5dc-8f5f-2910-2085-c658dc145...

[Former Member]

Hi,

1. Material code are mentions in the vendor invoice and cost will be same what ever you have mentions in the PO.

2. We need to create PO with ref of contract OR In contract we maintain vendor and material code. OR ask ABAPer to put check In BADI -ME_PROCESS_PO_CUST for check vendor has contract or Not.

3. Freight condition should be in PO . contract freight condition is copying in PO or Not.

Regards

KKK

[Former Member]

Hi john,

As per the agreement made with transporter service  purchase order will be raised per KM or quantity

PO line item will be month format for each and every month if any amount chages due to fuel hike or any other charges than new service Po will be reaised for remaing period

[cooladas_sal]

Dear Ram Sai,

unfortunately your suggestion is not solving my issue as the requirement is for the freight cost to fall to the material moving average.

Thank you

[Former Member]

add condtion in PO or else add material cost on the particular material through MR21 for price updating

[Former Member]

Hi,

Let's say your requirement is to Transport Steel and you want to have Yearly contract with a Freight vendor for that.

=> You create Service Master Record in AC03 using the right UOM like KM

=> Create Value Contract (WK) in ME31K with Item Category D and relevant AAC.

In that case you need not to use Freight condition in PO again. Let's look at your questions now;

1) Each time you create PO (Release Order) with reference to the Contract and Vendor receives the same. While invoicing he refers the same PO number

2) Go to ME3L / ME3M / ME3N and use Item category D as the reference parameter and you will get the Service Contracts and you can know whether it exists

3) In the above said T codes you can see what % of the contract value already consumed and thereby what is left to be used.

Thanks

NR

[cooladas_sal]

Dear N.R,

thank you for your answer. The only issue to your approach with the Service Contract is that the cost is not going to the material code thus a condition in the line item has to be utilized

B.R

John