Freight appropriation (distributing the freight costs into purchase receipt lines/invoice lines (Pro Rata)

Where freight can be applied either to all lines across a purchase receipt/purchase invoice or just to specific products on a purchase receipt/purchase invoice.

Step 1 - Create a freight product (must be a non-stock control product)

NOTE: Do not use the existing freight product for freight appropriation.

Instead, copy the existing product that stands for Suppliers freight product, and change the product ID and the product name to something that will make sense to you when using this product.

Step 2 - System Types

System Types

Navigation panel > Administration > Advanced > System Types
System type Name: PURCHASING
System type Codes:
CATEGORY-NAME-FOR-ABSORB
PRODUCT-CODE-TO-BE-ABSORB

Open

All lines to be affected

If you want all lines of the purchase receipt/purchase invoice to be affected by the freight absorption, you only need to key into the value field of PRODUCT-CODE-TO-BE-ABSORB, which is the freight product you created in the steps above.

For ONLY particular products/categories to be affected

If you only want particular products/categories to be affected on the purchase receipt/purchase invoice then you need to fill in the value field for both system types.

CATEGORY-NAME-FOR-ABSORB - in the value field, put in the Category name exactly as it appears in the Product Categories module. If it is to apply to more than 1 category, separate it only by a ; with no spacing.
If you require to apply the freight cost over all products then leave the value in this system reference blank. That means that the freight cost will be distributed among all products within all product categories.

PRODUCT-CODE-TO-BE-ABSORB - in the value field, key in the freight product you created in the steps above.

How to process the product to be absorbed

The product can be added either to the purchase receipt or the purchase invoice.

If you are processing the purchase receipt and the supplier invoice at the same time, then the product to be absorbed would be added manually by you to the receipt at the time of the purchase receipt. i.e. key in the product you created for the freight absorption, key in the value ex or value inc for the freight (that is to be absorbed), and then when you click on the button Prorata (currently this button is only available on the Purchase Receipt window) it will remove the freight absorption product off the receipt and all the actual product lines on the receipt will absorb the freight appropriately. (You will get a pop-up box telling you how much each line is absorbing)

Open

If you are processing the supplier invoice separately from the purchase receipt, then the product for absorption would be added to the purchase invoice NOT THE PURCHASE RECEIPT as the purchase receipt does not care about the cost price at this point. (cost price is where the freight absorption would happen)

Once the product for absorption is added, you change the total value inc or ex (depending on the freight value given to you on the invoice) to be the value of the freight from the supplier invoice when you hit Prorata button on the Purchase Invoice it will remove the freight absorption product off the receipt and all the actual product lines on the receipt will absorb the freight appropriately. (You will get a pop-up box telling you how much each line is absorbing) OK the pop up box then hit the Finalise button on the Purchase Invoice.

If you then go back to the purchase invoice you can see that the freight cost is now absorbed into the product lines on the purchase invoice and the freight product is no longer on the purchase invoice.

Processing at the Purchase Receipt

Navigate to the purchase order
Highlight the Purchas order and click on Receive action button in the top ribbon
Check the Date, products, quantity, Proudct units and pricing
Make the changes required on the purchase receipts
Click on Save

Before Freight product

After Freight product of $11 inc gst and before clicking on ProRata

Click on Default Total and then click on Save
Check the Value INC/ Value Ex and Tax Value
Next click on the PRORATA action button on the top ribbon

A pop-up window will open with the value of the freight cost to be absorbed and a list of each of the products with the absorbed cost value

Formula: Based upon system reference if all products are to be prorata or a range of product categories

Freight Quantity = 1 and Value inc = $11 and the value ex of the freight = $10
Formula = value ex of each line/total value ex of the full receipt * freight ex cost (once again only the lines that are to be prorata based on system reference and total value ex will be the sum of those products not necessarily the total value ex of the purchase receipt)
Eg below is as follows :

First line Product #inkpost = $94.70/$523.88 (total value ex) *10 (freight price ex) = $1.80766 to be added to that purchase receipt line value ex
New value on purchase receipt line = $94.70 +1.80766= $96.507 value ex

Value inc for that line $96.507 +9.65 = $106.157 value inc

Click on OK and check the values and default total value

If it looks right then click on either Finalise or Complete.