DELIVERY COSTS IN PURCHASE ORDERS

The secondary vendor for freight, Insurance and clearing will be identified in the Purchase order against the specific condition type. The secondary vendor can be changed during the good receipt stage also.

The delivery condition charges shall be booked to a separate account code at the time of Goods receipt. It is necessary to identify the Freight, Clearing, Insurance vendor in the PO for the proper valuation of the material at the GRN (Goods receipts note) stage. However at the time of preparation of GRN, the actual vendor to whom the payment is to be made can also be identified.   In case if the transportation charges have to be paid to the material vendor than in delivery condition the vendor field can be left blank & the freight gets automatically allocated to the Material Vendor

• Freight Supplier can be changed at the GRN stage only if the planned delivery conditions have been identified in PO. However the value of the delivery cost can be changed at the time of bill passing only.

•  Delivery Charges cannot be changed /amended in GRN

•  Any changes in the value of delivery charges (e.g. freight, Clearing, Insurance) can be carried out at the time of invoice verification. Thus vendor can be paid based on the actual invoice amount.

Unplanned Delivery Cost in Purchase Orders

Unplanned delivery cost are those cost which are not known at the time of procurement and is known only after the vendor produces the bill. So these cost are adjusted in invoices as unplanned delivery cost. If sufficient stock is there during invoice verification, these cost are apportioned to stock account. In case if stock is sold out during these period it goes to Price Difference account (Expense Account).