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Former Member
Dec 17, 2015 at 08:08 PM

Vendor Freight (inbound and direct)

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We are looking for a better way to handle freight on our inbound PO’s, as well as “Direct po’s” (direct/3rd party POs are POs where we order from the vendor and the shipment is sent directly to the customer).

Today, we have very complicated process for Sales Order related PO’s we tell the vendor to prepay and add the shipping changes to the invoice. We then allocate the freight to the transaction, and bill the customer when we get the invoice with the freight charge.

Future state: We are looking to take advantage of our negotiated rates for small parcel, and have the vendor ship collect and provide the freight account number. We also want to evaluate our complicated process to determine if there is a simpler, better way.

We deal with thousands of vendors, (about 400 vendors make up the top 80%). Some ideas being discussed are estimating the freight amount based on weight, or Cost of the material. This is where we are looking for “best practice” or perhaps how other distributors are handling this. Roughly 50% of the time we pass the freight on to the customer, so that is a significant dollar amount.