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How to add freight line in an Item PO without reopening the PO

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Posted on by Leisa Howell

We are a company dealing in items and ideal process for procurement of goods is - create PO, receive goods, invoice it against the vendor invoice after the 3 way match.

Freights are the charges which are not known at the time of creating and sending PO to vendor, so usually after PO is created and released, & PR is done, then at the time of invoicing we are required to add a freight line based on invoice received. To do the same, we have to reopen the PO as it cannot be modified if already released.

This is a problem at the time of partial receiving of goods becasue if out of 100 quantity of an item ordered, 80 qty is received and invoiced by vendor along with freight, when we reopen the PO to add freight - NAV populates all backorder qty in "Qty to Receive" column, which needs be zeroed out if only freight is required to be added. If this check is not done (which is usually skipped out by a processor handling 50+ POs in a day) and once released - it receives the remaining 20 qty in NAV along with 1 qty for freight - 20qtys being wrong receiving which are not there physically available and we cannot undo the receipt as well!

To find a way we have explored item charge assignment - by creating a GL based invoice and assigning it to the respective PR - which gets linked to the respective PR and adds to the cost of the item received but does not show as a seperate freight inward cost in P&L.

Is there any other way if we can add a freight line in a PO without reopening it or any other method of assigning it to the PR?

I have made my best efforts in explaining the situation but in case of any questions, please let me know as we are trying to figure this out as soon as possible!!

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Leisa Howell 65 on at

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RE: How to add freight line in an Item PO without reopening the PO

Hey Steve,

Thanks a lot for the advise, I don't know why I never explored that! This should serve as great help! Thanks. If in case of any further questions, I will be back.
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Community Member Microsoft Employee on at

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RE: How to add freight line in an Item PO without reopening the PO

Leisa,

Yuk. You want the Freight to be expensed but you also want it to be reflected against a PO you are processing. So Charge(Item) will not work. If I recall in NAV 2016, go to Purchase & Payables Setup, their should be a field on the left called Default Qty. to Receive. Set this to Blank. This way when you enter Freight and Post the remaining Items to Receive will not post.

Thanks,

Steve
Leisa Howell 65 on at

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RE: How to add freight line in an Item PO without reopening the PO

Thanks Steve (again!)

To clarify, we do not want Freight to hit the P&L, as an Expense, and also impact the Item cost.

We only want the Freight to hit the P&L as an Expense for us to have the ability to analyse the Inbound Freight expense ratio to Sales - and also maintain the connection of the freight cost with the respective PO.

In that process, currently we are reopening the PO to enter the Freight cost as a line item.

Obviously every PO has multiple items requested and we receive a few of them at a time, so everytime we reopen a PO to add freight for the few items - it increases chances of erroneously receiving the remaining items at the time of Release of PO. A processor if clicks on Release without confirming the remianing items are updated to "Zero" Quantity or the "Actual receipt Qty" in "Qty to Receive column" - the person makes an irreversible mistake for us, as once invoiced the receiving cannot be reversed.

So kindly advise how to handle such situation.
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Community Member Microsoft Employee on at

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RE: How to add freight line in an Item PO without reopening the PO

Leisa,

Yes, Charge(Item) will capitalize to the Item and will show in the P&L when the Item is sold. That is what Charge(Item) does. Why would you want the Freight to hit the P&L, as an Expense, and also impact the Item cost? Most companies will follow this GAAP when recording Landed Cost to impact the Receipt of Items and its related Cost will hit the P&L when the Item is sold.

You cannot have both.

Thanks,

Steve
Leisa Howell 65 on at

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RE: How to add freight line in an Item PO without reopening the PO

Thanks Steve for a quick response, but this will add the cost to my receipts line and will not display the freight expense as seperate line item in P&L as expense, right? Any way around to it?
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Community Member Microsoft Employee on at

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RE: How to add freight line in an Item PO without reopening the PO

Leisa,

For Freight Charges I recommend using the Type - Charge(Item) when entering the Purchase Invoice. On the Purchase Lines, select Type = Charge(Item). Enter a Quantity = 1 and the Direct Cost of the Freight Invoice. You then will click Line/Related/Item Charge Assignment. You will then Get Receipts Lines for the related Purchase Orders invoiced on the Freight Invoice and then allocate the 1000.00 to those invoices. You can manually enter or use Suggest.

Hope this helps.

Thanks,

Steve

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