Transport costs on EXW suppliers

(0) Share

Report

Posted on by Community Member

This question raised on our department whether we can automatically add a line item for transportation costs on Suppliers with EXW incoterms?

I think it might be handy but also raise my question what if...

What if transportation is done by our self?

What if size of package change and with that also weight and price will have influence on the transport.

So is there anyone who has come up with the same idea and a solution?

Many thanks for reading this question.

I have the same question (0)

All responses (5)

Answers (2)

Sort by

Verified answer

Ludwig Reinhard Microsoft Employee on at

Like (0)

Report
Copy link

Link copied!

Hello R. de Bode,

What many companies do is adding an automatic charge code on top of the item costs that your supplier invoices you.

The idea of that charge code is to allocate - based on a specified percentage - your actual transportation costs to the different items that you purchase.

This allocation will never exactly match your actual transportation costs that depend on weight, volume, etc. , which is however often sufficient.

From an accounting perspective the entries will be:

DR: Expense / Item charge account

CR: Bridge account

When you post the freight invoice you would post

DR: Bridge account

CR: Accounts Payable.

In an ideal world, the bridge account balance should be $0.

In reality it won't, which gives you an indication how good or bad your allocation was and whether your allocation percentage needs to be modified.

Would that be an acceptable workaround for you?

Best regards,

Ludwig

Was this reply helpful? Yes No
Community Member on at

Like (0)

Report
Copy link

Link copied!

Well thank you Ludwig, this workaround is not what we hoped to get for an answer but if there is no other way maybe we check this with our financial department.

Hope to hear another option soon.

Best regards,

Richard

Was this reply helpful? Yes No
Verified answer

Ludwig Reinhard Microsoft Employee on at

Like (0)

Report
Copy link

Link copied!

Hello Richard,

There are some ISV solutions out there in the market and available on the MS Appsource that can handle the scenario you described in a very flexible way depending on your needs.

The disadvantage of those solutions are of course their price and the time it takes to implement them.

The workaround that I described is for free and just needs a configuration :-)

Best regards,

Ludwig

Was this reply helpful? Yes No
Community Member on at

Like (1)

Report
Copy link

Link copied!

Thank you Ludwig I shall make this clear to my college.

Best regards,

Richard

Was this reply helpful? Yes No
Community Member on at

Like (0)

Report
Copy link

Link copied!

There is no proper solution found this moment so I keep tracking this question internally.

Was this reply helpful? Yes No