Some companies need to have full control of their freight costs, including the costs that are passed on to customers. This white paper discusses how System Five combined with processes at a sample company can handle advanced freight needs. This sample companies needs are based on real world usage from customers actually using the techniques discussed.

The main goal of this article is to be a template that helps you put together a plan and develop processes to handle your tracking needs associated to freight

• You need to have the cost show on invoices to your customers.
  • Identified requirement: Freight to have stock control. Since costing is important we need to tie the PO to the Invoice.
• You may have 30 purolator orders by air or ground in a day. Establishes that recording tracking numbers is important
• There are several different people handling the individual roles, here are the roles:
  • Person creating invoice
  • Person creating PO
  • Person receiving PO
  • Person doing billing
  • Person controlling overall success of process (Review)
• Problem: You don't always get the freight charge on the packing slip. You also may have to adjust the value at a later date.
  • Addition complication: You have to complete the invoice to the customer without having the confirmed cost.
  • Requirement identified: A process is needed to “go back” and fix the cost on the invoices
• There has been a need to simplify and properly control this process.

• Inventory item setup
  • Needs to be a regular inventory item with stock control. This helps with control and tracking.
• Clerk creating the invoice creates a special order to associated freight part (Air or Ground)
• Shipper estimates freight, freight is a line on the PO and adds each special order line.
• Receiver identifies if they have the freight invoice during receiving or not
  • If they have the freight invoice, they update/verify the price and receive the PO
  • If the don't have the freight invoice, they change the cost on the freight line to $0 and receive the PO
  • Now the receiver removes the $0 cost freight item and adds the Unknown Freight Item and sets its retail $ value to the estimated retail value and cost of the freight
  • Removing the item from the invoice asks them to “place the item into regular stock”. Say yes. This line will later be added back to the invoice by the AP clerk.
• The AP clerk gets the bill in later and when the PO is added to the bill notices that the Freight line is at $0.
  • They go to that customers invoice and remove the Unknown Freight Item and re-add the Freight item that should have been there. The retail must match the estimated amount, but the cost needs to be changed.

• Special orders keep orders with Freight invoices moving to the correct customers at the correct costs. Part of the making sure clerks don't get sell below cost messages
• Cost on items received without freight bill in hand get changed to $0
  • This is the second part of the processes that prevent clerks from getting sell below cost messages
  • This also is the indicator for the AP clerk to know they have to go back to the order and fix it
• Inventory for the freight item has a quantity.
  • This helps us identify how many freight orders have not been assigned.
  • This also lets us compare the quantity there vs the number of GL lines showing in the COGS account for the Unknown Freight part (They should be the same).
  • Potentially useful info: We can see a list of PO's that these are for.
• The unknown freight item is only used until the correct paperwork is in place, so it in itself is a control element.
  • If we see a balance in the balance sheet for it's category (which is to be seperate from other freight categories) we know there are outstanding unknown freight items.
  • If items are older than 1 week we know we need to look at those items
  • We can get simular information by looking at the sales history of the unknown freight part.

• 01-Intro
• 02-Setup & Summary
• 03-Sales Clerk Invoicing
• 04-Shipping and Receiving
• 05-Completing the invoice & tracking unknown freight
• 06-Billing and going back to correct cost on the customers invoice
• 07-Follow up, Control, and Summary