Putting freight on received items with an item charge in Business Central

A freight bill posted straight to an expense account leaves your item costs too low. In Business Central, post it as an item charge and assign it to the receipt it belongs to, and the freight lands in the cost of the goods it carried.

The example

The steps below use a sample distributor, Lone Star Industrial Supply. Your customers, items and numbers will differ; the page and the fields won’t.

Receipt 7000351 (order 5000358) came in yesterday on two pallets, one of UCP205 and one of UCP208.

DriveTrain Power Transmission (V1007) hauled it and billed $122.50, invoice FRT-60599, charging the same for each pallet.

Post the bill on a Purchase Invoice as item charge P-FREIGHT, assigned equally to the two receipt lines, so the freight is part of what the items cost.

Step by step in Purchase Invoice

1.
Search for Purchase Invoices with the magnifying glass at the top, and open it.
2.
On Purchase Invoices, choose New.
3.
Type the carrier, V1007, in Vendor No. and press Tab.
The bill is from the carrier, not from the vendor of the goods: the carrier is who gets paid.
4.
Type FRT-60599 in Vendor Invoice No.
5.
In Lines, change Type to Charge (Item).
6.
Type P-FREIGHT in No. and press Tab.
7.
Quantity is 1. Type $122.50 in Direct Unit Cost Excl. Tax.
8.
With the line selected, choose Item Charge Assignment in the Lines part.
9.
Choose Get Receipt Lines.
10.
Tick the two lines of 7000351, UCP205 and UCP208, then choose OK.
11.
Choose Suggest Item Charge Assignment....
12.
Leave Equally selected and choose OK. Each line gets Qty. to Assign 0.5: $61.25.
The carrier charged per pallet, one pallet each. By Amount would put more of it on the dearer item.
13.
Rem. Qty. to Assign is 0. Close the page with ✕.
14.
The line shows Qty. to Assign 1. Choose Post.
15.
Choose Yes.

Mistakes that cost money

These are the checks Simetta’s scored test makes on this task, and what each mistake costs a distributor when it happens for real.

Freight or duty not put on the items
Expensed instead of assigned, the charge leaves the items looking cheaper than they were to bring in, and every sale of them shows more margin than it made.
Item charge on the wrong lines
A charge spread onto items it had nothing to do with overstates their cost and understates the others: pricing and margin reports then point the wrong way.
Vendor's invoice number not recorded correctly
Duplicate-invoice checks only work when the vendor's number is keyed exactly. It is also what the vendor quotes when they ask about payment.
Voucher does not match the vendor invoice
The payment won't match what the vendor billed, so their statement shows a balance forever and their AR team starts calling.

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