How to bill freight costs to the customer?

[former_member194343]

Dear all,

we as a shipper (Chemistry business) want to introduce SAP TM.

We are currently using LE-TRA for the processing of our shipments. There is a standard functionality which allows shipment costs (as calculated in the Shipment cost document) to be billed directly to the bill-to-parties of the included deliveries/sales orders. With SAP TM, we want to perform charge calculation in TM, of course. To our current knowledge, there is no standard functionality which allows shipment costs transferred from SAP TM to SAP ERP to be billed to the customer. Is there any "common" custom development or does anyone have an idea where to start for this?

[Former Member · Accepted solution]

Hi Michael,

For a similar requirement, we 'custom integrated' our sales orders/deliveries to create FWO's (instead of OTR/DTR's) which then automatically creates FU's (based on FWO's FUBR).

Onwards, FU's can be planned to create FO's and FSD's; while FWO's can create Forwarding settlement documents which can be transferred back to ERP for customer invoicing.

There is standard interface available for this order integration (since its a sales order to TRQ integration- FWO is just another type of TRQ), and your ABAPer will need to set the field mapping right. This takes some efforts but the design surely works smooth.

Regards,

narender

[former_member194343 · Accepted solution]

Thanks for this answer! But, going this way, this results in two invoices to the customer, one for the material and one for the freight, right? I don't think we could explain that...

[Former Member · Accepted solution]

You are right. Ideally speaking you would need to invoice the customer only when you are in a forwarding business. We mapped similar case for an 'embedded LSP' kind of business (where one of the business units of a company caters to the transportation of other BU's). So we created only an internal settlement document from the FWO (it could be either intra or inter-company internal settlement).

Can you elaborate why you being a shipper would need to invoice a 'customer'?  As much as I remember LE-TRA, the shipment costs transferred to a customer invoice also pertain to only freight( by virtue of check mark TSPP in pricing procedures and few copy controls etc.).

[former_member194343 · Accepted solution]

Of course I can 🙂 Say we are selling a product XYZ to company ABC. In SAP ERP, we enter a sales order for the product and subsequently create a delivery and a shipment. The shipment is in most cases created by our internal Logistics department. They take care of communication with carriers etc. Because we have maintained our freight rates in the system, shipments costs are automatically calculated for the shipment in the corresponding shipment cost document.

As soon as the shipment costs are calculated. the sales order can be invoiced. The invoice contains conditions regarding to the material (e.g. list price, discounts...) as well as to the shipment. These conditions are (in fact: have to be) the same as in the shipment cost document. If defined in the calculation scheme, we can even give discounts/surcharges on the freight.

As a result, the customer ABC receives a single invoice for the order, containing material and freight costs.

We could go on with this if we wanted to have fixed freight rates for customer billing which are independent of the actual freight costs (which will be calculated in SAP TM in the future). But we are not Amazon 😉 So we want to bill the actual freight costs to our customers. This seems to be common in Chemical Industry - correct me if I'm wrong!

[tarunkumar · Accepted solution]

Hi Michael,

I agree with you completely. We have designed exactly the same scenario as you mentioned recently for a manufacturer (Shipper) who wants to include actual freight charges in billing document.

Achieving it depends upon your previous process (e.g. your process starts from OTR integration or from DTR integration).

Best option is to utilize the cost distribution feature of TM which will push the freight cost (material specific) to the ABD (Agency Business Documents) in ERP. From ABD you can pull the relevant freight cost to your billing document by doing some customizations and implementing BADIs.

Exact modeling depends a lot on your detailed scenario.

Thanks & Regards,

Tarun

[Former Member · Accepted solution]

Agreed with Tarun. ABD is easier way to go about it in this scenario. It should be lesser customizations to pull ABD charges to customer invoice. There are BADi's available around ABD settings.

[former_member182454 · Accepted solution]

Hi Michael,

Ultimately did you proceed ahead with ABD documents to meet your solution?

[former_member630229]

Hello @Michael Seifert and @Petra Hunger,

Sorry to disturb you as the post is older.

I am facing this scenario (Shipper) we've the requirements to send the freight cost only in one invoice.

Could you share if there is any solution applied since the post is created?

Kind regards

Rogerio Lima

[former_member449176]

We have a Scenario in which we can calculated the Shipment Costs in reference to Shipment and also trasnfered to Accounting (Settlement of Shipment cost).

Now , requirement is supoose the Company have Paid 1000 Euro to their Vendor (freight Costs) but now we have to invoice 1200 euro for freight to the customer . Could you please tell what Customizing we Need and how is it possible.

Thank you In Advance

Sakshi

[petra_just]

Hi Michael,

to invoice the freight costs as calculated by TM, the first question is whether you will keep the LE shipment? Many customers who deal with stocks need to keep the LE shipment because of Wm integration. If you keep the LE shipment, you may want to transfer the costs from TM to the LE shipment. I have seen this at one customer.

If the relationship between sales order/item and freight order/shipment was one to one, this would be relatively easy, but usually a freight unit may use several stages to get to the customer and this may involve several freight orders and sometimes service orders (for logistics providers at the port for example) and often several vendors. The way that one of my customers has solved this was to combine all these freight orders into FSDs and transfer those into the shipment items via a custom interface.

If you do that, you end up in the LE shipment with all your costs and there will be a separate item for each different vendor. Accounts for different types of freight cost can be assigned in LE-TRA. At the shipment cost document item, you have pricing with condition types. In the pricing procedure, you can link custom coding to a condition or a subtotal to transfer the result into another document. This way, the content of these freight cost condition types can be transferred into the billing condition type that contains the freight cost. To link the shipment and the related FOs into the shipment items takes advantages of the LE-TRA functionalities and I guess SAP standard will also go into this direction.

This works well and its close to standard, but it means that you cannot invoice your customer until all your freight settlement documents are transferred to ERP and it means that you have to have one FSD for each FO. Having one FSD for each FO is what I do not like about it. So I would use this solution because you will have accounting integration and the transfer of the charge calculation off the FO into the shipment cost item makes sense. Its a good solution for posting accruals.

But, I would just like to avoid the 1:1 relation between FO and FSD. Thus, I am wondering if it would not be smarter to attach a custom program to the billing freight cost condition type that reads all FOs and service orders attached to the sales orders contained in the billing documents and take the total freight cost amount and write it into the condition type. The links between a sales order item and the FU item and the stages of the FU and the FOs attached to those stages is there. This is possible and it would not force you to have a 1:1 relation ship between FO and FSD (which is a lot of FSDs and I prefer 1 monthly FSD per service provider or at least by-weekly). On the other hand, people may add costs to the FO after the report has run. This has to be handled via business rules.

A good thing is that this custom program could run when the billing run is done (in the background) or even be triggered by a separate report at night. So performance-wise, it may also be a good option.

Why not use cost distribution and the possibility to calculate costs for a product item on a FO? There can be several FOs for one FU if it travels through several stages. Also, you do not have cost distribution in service orders and you will have several carriers, so there will be costs that you have to get from the service order anyway using a custom program.

I trust that SAP will include cost distribution in the service order in one of the next releases, thus I would prefer the custom report that gets the costs from the FOs and service orders attached to the FU stages into the condition types. I you have several FUs within the service order you have to make your own distribution logic. I used a service order for a ferry and could break down the cost per product easily. The custom report can be easily switched off and replaced by a possible standard solution later. It sounds horrible, but its not that bad. Biggest disadvantage is that you have to freeze the FOs and service orders when the billing document was sent to the customer or you just  have to live with the fact that some costs will come later and will not be invoiced to the customer. I prefer a custom report attached to a billing condition type that gets all TM freight costs linked to the sales order items that are included in the bill. This report would have to add the charge calculation amounts of all FOs and service orders linked to the FU items' stages connected to the SO items. Btw, this report also allows you to include several SOs/deliveries into a bill and not invoice each shipment to the customer...

hope it helps

Petra

[former_member193027]

Hi,

Thanks for the wonderful explanation.Can you kindly provide some technical input on the custom program or custom interface which you are referring here.