The management of actual shipping costs within Dynamics 365 Business Central's Dynamic Ship module offers businesses the ability to accurately track and manage the freight expenses associated with shipping orders to customers. This feature is crucial for maintaining profit margins and understanding the financial aspects of shipping operations. Let's dive into how actual shipping costs are handled and provide a practical example to illustrate the process.
Understanding Actual Shipping Costs
In Business Central's Dynamic Ship module, the distinction between the freight price charged to the customer (including any markup) and your actual freight cost is important for financial tracking and analysis. Here’s how these are managed:
- Freight Price to Customer: This is the amount billed to the customer for shipping their order and is visible on the sales order freight line under the "Unit Price" column.
- Actual Freight Cost: This is the cost incurred by your business to ship the order. It's recorded on the same sales order freight line but under the "Unit Cost" column. By default, the "Unit Cost" column isn’t visible on the sales order page, requiring personalization of the page to make it visible.
Example Scenario: Shipping a Customer Order
Imagine you're a distributor of computer parts, and you receive an order from a customer for various components. The order requires shipping, and you use Dynamic Ship to manage the logistics.
- Sales Order Creation: You create a sales order for the computer parts, including all necessary item lines for the products being ordered.
- Shipping Cost Calculation: Based on the weight, dimensions, and destination of the order, Dynamic Ship calculates an actual freight cost of $50 to ship the order.
- Customer Freight Charge: You decide to charge the customer a freight price of $65, which includes a markup for handling and administration. This $65 is listed under the "Unit Price" column on the sales order freight line.
- Recording Actual Freight Cost: You personalize the sales order page to display the "Unit Cost" column and enter the actual freight cost of $50 for your internal tracking.
Viewing Your Freight Costs
- Without Invoice: If you're not invoicing the freight charge directly (for example, if you're using a freight price rule set to "Don’t Add Freight Charge"), you won't see a line for your costs. To view your actual freight costs under these circumstances, you could change the freight price rule to "Add Actual Freight Cost" with a 100% discount. This allows you to see and record your costs without billing them to the customer.
- Analysis Tools: For businesses utilizing Business Central SaaS with PowerBI, the Dynamic Ship Analysis app provides a comprehensive way to view and analyze freight costs. Alternatively, if PowerBI is not used, the Freight Information report available from the Insight Works License Plates page can be selected to review shipping expenses.
Conclusion
Understanding and managing the actual shipping costs versus the freight price charged to customers is vital for maintaining transparency, profitability, and efficiency in shipping operations. By accurately tracking these costs and utilizing the available analysis tools, businesses can make informed decisions about shipping strategies and pricing, ensuring that they cover costs while remaining competitive.
