Adding Freight / Shipping & Handling

Overview

If you need to include freight charges on a Billing and/or on a Purchase Order and you are starting from a Sales Order, you can exclude the freight line from the Sales Order and add it to the Billing or Payable when those are created. However, if you want to include the freight line on the SO, here is a suggested approach:

Freight Product

Create freight (shipping&handling) as a non-inventory product.  Set up the product record as follows:

• Inventory checkbox is unchecked
• Inventory Type = Purchased This will allow you to include it on a Purchase Order
• Unit Cost = $0.00; this is a required field for products with inventory type = purchased, so a value must be entered
• Set the GL accounts on the product record as follows:
  • Revenue GL Account = 4100 - Freight Revenue (example)
  • Expense GL Account = 5100 - Freight Expense (example)
  • Inventory GL Account = 1500 - Inventory (example); the inventory GL account will not be used in any accounting transactions, but it is a required field and so a value must be entered.

Sales Order

When you create the Sales Order, include one (1) line for freight, with the Quantity = 1 and the Unit Price = Total amount of freight to be charged to the customer.

Billing

Create the Billing from the Sales Order and the Sales Order Line's freight line will flow thru to the Billing Line.

Purchase Order

If there is just one  Purchase Order (i.e., all lines on the Sales Order are being ordered from the same vendor), when you create the Purchase Order,  associate the freight line with that Purchase Order/Vendor. When the Purchase Order is created, it will include a line for the freight. Edit that line so that Quantity = 1 and the Unit Price = Total amount of freight being charged by the vendor.

If there is more than one Purchase Order (i.e., lines on the Sales Order are being ordered from different vendors) that will be created from the Sales Order, then do not associate the freight line from the Sales Order with any of the Purchase Orders. Instead, once the Purchase Orders are created, add a freight line to EACH of the Purchase Orders, with Quantity = 1 and the Unit Price = Total amount of freight being charged by each vendor.