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January 24, 2017

1/24/2017 12:20:00 PM
Setup Freight in Oracle Receivables


Oracle Applications: Receivables: Setup Freight

 For AutoInvoice

When processing freight in Receivables, you have two options:
  1. Recognize Revenue On Freight
If you want to recognize revenue on freight and calculate taxes against it, then you need to set up freight as an inventory item.  Additionally, there are profile options and system parameters you need to set up,. If you set up Freight as an Inventory item, then multiple freight lines will be at the invoice line level rather than a single freight at the header level.
     2.  Do Not Recognize Revenue On Freight
If you just want a simple freight charge for additional services such as shipping and handling or courier fees, without recognizing any revenue against the freight amount or calculating taxes against it, then you do not need to setup freight as an inventory item.

1. Check Freight Setup
The most important thing to review when encountering issues regarding Freight is to review your setup. Typical issues are:
  • Error message: Please correct the freight account assignment, or
  • the segments of your GL account is not what you expected
are resolved by reviewing the Freight setup.

     a. Transaction Type Setup
If you need to associate a freight charge to a transaction, ensure that your setup for the Transaction Type allows freight.

Responsibility: Receivables Manager
Navigation: Setup > Transactions > Transaction Types

b. Freight As An Inventory Item
By default, Receivables does not calculate tax on freight charges. If you need to calculate tax on freight, you must set up freight as an inventory item.

Responsibility: Receivables Manager
Navigation: Setup > Transactions > Items > Define Items

Create an inventory item for freight and note the following:
In the Main tab:
  • Display Attributes = All
  • Unit of measure = Each
  • User Item Type = Freight (Only Items with User Item Type = Freight, will appear in the List of Values when you define the Profile Option: Tax: Inventory Item for Freight and the OM Parameter: Inventory Item for Freight ) 

In the Invoicing tab:
  • Invoiceable Item = checked
  • Invoice Enabled = checked
The value in Sales Account is picked up by Auto Accounting if you source from Standard Lines

System Profile Options
If you process freight as revenue and you want tax to be calculated against the freight, then you must setup the following system profile options for your Order Management (if you interface transaction from Order Management) and Receivables Manager responsibilities:
ReleaseProfile OptionValid ValuesDescription
11.5Tax: Invoice Freight as RevenueYes/NoYes, if you want tax calculated on freight lines.
No, if you do not.
 Tax: Inventory Item for Freightan Inventory Item with User Item Type = Freight, e.g. Freight Charge from previous stepSpecify the inventory item associated with freight.
12.xeBTax: Invoice Freight as RevenueYes/NoYes, if you want tax calculated on freight lines.
No, if you do not.
 eBTax: Inventory Item for Freightan Inventory Item with User Item Type = Freight, e.g. Freight Charge from previous stepSpecify the inventory item associated with freight.
   
d. Settings In Order Management


The following is only applicable from Release 12 onwards.

If you are interfacing/importing invoices from Order Management, do the following:

Responsibility: Order Management Super User
Navigation: Setup > System Parameters > Values

ParameterValueDescription
Inventory Item for Freightan Inventory Item with User Item Type = Freight, e.g. Freight Charge from previous stepSpecify the inventory item associated with freight.
Invoice Freight as RevenueYes/NoYes, freight lines will be interfaced with a LINE_TYPE of LINE

No, freight lines will be interfaced with a LINE_TYPE of FREIGHT
'
 
NOTE:  The values set for the Order Management system parameters above are used in conjunction with the Profile Option: Invoice Freight as Revenue.  If the profile option is Yes, and if a freight line is interfaced with a LINE_TYPE of
  • LINE, taxes will be calculated against the  freight amount.