Adding Freight on an Award

If you want the Unit Price of the ordered items to reflect the Freight amount associated with that particular Award, you must allocate the apportioned amount of the total Freight cost for the Award into the Unit Price of each item. Therefore, the Total Amount of the Commodity Line would be equal to the original Unit Price of the item plus the apportioned Freight amount multiplied by the Quantity ordered. When the item is in Inventory, this method will include the Freight Amount as part of the Unit Cost of the Inventory Item. An example of non-inventory is shown below:

Example: Purchase Order for $100.00 with 2 Commodity Lines and Freight charges of $20.

Commodity Line 1:         Unit Price: $75.00          Quantity: 1        Line Amount: $75.00     

Commodity Line 2:         Unit Price: $2.50            Quantity: 10      Line Amount: $25.00     

 

The Freight amount associated with each line would be $15.00 for CL1, and $5.00 for CL2.

Therefore the user would enter $90.00 (75 +15), for the Unit Price on Commodity Line 1, and $3.00 (2.50 + .50) for the Unit Price on Commodity Line 2. Therefore, to reflect the Freight amount as part of the Unit Price, the Award would be entered with the following data:

Commodity Line 1:         Unit Price: $90.00          Quantity: 1        Total Line Amount: $90.00

Commodity Line 2:         Unit Price: $3.00            Quantity: 10      Total Line Amount: $30.00

 

When the Invoice comes in for this Award, the Freight has already been allocated as part of the Unit Price of each item.

When adding Freight as a separate Commodity Line on an Award, the Line Type used to charge the Freight amount must be a Line Type of Service. You can only select commodity codes that have the Freight option selected on the Commodity (COMM) table. 

• If the Freight Amount is known when processing the order, then the Freight amount should be entered into the SC Amount field, and you should choose the FOB Destination, Freight Prepaid Free on Board option. The Freight % on the Accounting Line will automatically be calculated based upon the amount entered on each Accounting Line associated with the Commodity Line. When the Invoice is received, it should be entered with a separate Commodity Line for the Freight Amount. The Invoice Commodity Line for Freight should reference the Purchase Order Commodity Line designated for Freight. The Invoice Commodity Line should be entered for the entire amount that appears on the Invoice.

• If the Freight Amount is not known when processing the order then the Freight amount should be entered into the SC Amount field as $0.00.  A Freight % must be entered on each Accounting Line associated with the Commodity Line. The sum of each Accounting Line Freight % must total 100% for the Commodity Line. You must choose from one of the following Free on Board options: FOB Shipping Point, Freight Allowed or FOB Shipping Point, Freight Prepaid and Charged Back. When the Invoice is received, it should be entered with a separate Commodity Line for the Freight Amount. The Invoice Commodity Line for Freight should reference the Purchase Order Commodity Line designated for Freight. The Invoice Commodity Line should be entered for the entire amount that appears on the Invoice. If a PRM is created using the Matching Process, then the SC Amount from the Invoice is used on the PRM.