How to Configure Shipment Cost as a Delivery Cost for an Accurate Valuation of Inventory

  • by Diony J. Ruiz R., SAP Architect and Senior Consultant, Group Intellego
  • November 13, 2015
Transportation costs related to inbound deliveries represent an important consideration in inventory value and need to be taken into account. Learn how to configure settings to customize shipments costs as delivery costs.
Learning Objectives

After reading this article, you’ll learn how to:

  • Enter the standard purchase order with a shipping notification
  • Generate an inbound delivery from the delivery due list
  • Generate an inbound shipment with the delivery
  • Create the shipment cost document on the basis of the shipment
  • Post the goods receipt with reference to the inbound delivery
  • Customize shipment costs as delivery costs
Key Concept
Shipment costs are not directly transferred to the accounting department, but are included in the materials management (MM) goods receipt document and added to the material.

During a goods receipt for an inbound delivery, the system takes delivery costs from corresponding shipment cost documents into account. Shipment costs as delivery costs are used to determine the value of the expense of transport and therefore the correct transfer in the entry of goods. You can integrate the planning and execution of the inbound shipment to the concepts of delivery cost.

 

Consider a business scenario in which a purchase order (PO) for one material has the value of $1,000. During a goods receipt for an inbound delivery, the system takes the delivery costs from corresponding shipment cost documents into account. In my example, the cost of planning and execution of the transport that delivered the material is $200 (Figure 1). I explain how to include this cost in the materials management (MM) goods receipt.

 


Figure 1
An example of the process flow during the development of a goods receipt for an inbound delivery

 

Transportation processing delivery costs can be considered for both standard POs and stock transfer orders. The determined shipment costs are not directly transferred to the accounting department, but are included in the materials management (MM) goods (inbound delivery) receipt document. They are added to the respective material (FI and Controlling [CO]). This scenario is relevant for a company’s internal shipments or for inbound shipments that are picked up from the vendor.

 

Shipment costs of this kind are not included in the PO. Therefore, the system does not display these costs on the item category view of the PO. The system copies these costs during the goods receipt posting (Figure 2). The shipment cost processing is carried out as if you had entered them in the PO item.

 


Figure 2
Process flow of shipment cost as a delivery cost

In general, such shipment costs are treated as planned delivery costs in PO processsing. I walk you through the following steps that are necessary to set up shipment costs as delivery costs:

  • Prerequisite steps
  • Enter a condition type in a PO
  • Create an inbound delivery
  • Create an inbound shipment
  • Create inbound shipment costs
  • Post the goods receipt and display the document account

Diony J. Ruiz R.

Diony J. Ruiz R. is an SAP architect and senior consultant at Group Intellego. He has 12 years’ experience in SAP Sales and Distribution and SCE (Supply Chain Execution), Logistic Execution (LE), transportation, and warehouse management picking. He has additional knowledge in SAP MM (Materials Management).

He has worked in industries such as manufacturing, pharmaceuticals, logistics, third-party logistics distribution, services, public government, chemical, maritime and customs, metallurgy, automotive, and mining industries.

His roles have included SAP Consultant Specialist, Project Leader, and Area Leader.

He is an SAP Certified Professional.

 

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