How Freight is handled in SAP

[Former Member]

Hello Gurus,

Can anyone please explain to me how Freight is handled in SAP. I see in SAP best practice there is a freight clearing account, which is a balance sheet account on the current liabilities side, and is assigned to key ERF in VKOA.

I understand that freight in balance sheet account probably captures the revenue earned from freight when a business charges freight to its customers. But shouldnt this very same account also be posted too when we actually get the invoice from our freight vendor?

Ideally this account should be then cleared against the vendor invoices we get. If there is a positive balance left then it would be revenue but if it had a negative balance then thats and expense. In case of an expense balance, shouldnt this balance sheet account be actually an expense account.

Anyone with a clear understanding of the process, please let me know how it works

Thanks

[Former Member]

From what I have understood, freight on the customer side:

freight account is a balance sheet account which is also mentioned in VKOA to key ERF. This account is posted to when freight is charged to customers and then when the vendor sends an invoice, we debit the very same account.

On the MM side freight is pretty much an expense account that is charged for everytime the services of a freight company is used for business reasons.

[Former Member]

Hi,

Please go through the following FI postings for frieght so that you can easily understand the process when the frieght is involved in business process.

Accounting Entry for Goods receipt

Stock/Inventory account Dr

GR/IR account Cr

Freight clearing account Cr

Accounting Entry on invoice verification of freight vendor

Freight clearing account Dr

Freight Vendor account Cr

When payment made to fieight vendor

Freight vendor account Dr

Bank Account Cr

Regards,

Satish Muvva.

[Former Member]

Was asking on the customer side. Thanks though