Technical Tuesday: Flat Rate Shipping

Doug Johnson | July 31, 2014

Acumatica provides flexible shipping terms, so you can charge for shipping according to your requirements.

In this article, I describe how to configure the following examples:

  • Flat Rate Shipping based on Order Amount/Free shipping on orders over $X
  • Shipping Charge based on Shipping Cost

Acumatica's Technical Tuesday

Appendix:

Discussion of how shipping costs are calculated using common carriers such as FedEx

  • Flat Rate Shipping
  • Setting up flat rate shipping

1. Flat Rate Shipping

Flat rate shipping can be established on the shipping terms screen. In this example, we will create a simple schedule that charges a flat rate for shipping based on the amount of the order.

  • Navigate to Distribution > Sales Orders > Configuration > Setup > Shipping Terms.
  • Create a new shipping term as illustrated in the screen below.

Setting up Flat Rate Shipping Terms

Setting up Flat Rate Shipping Terms

Items to note:

  • We set three categories of charges based on the amount of the order. If the customer orders less than $50, then we charge $5; if the customer orders $50-$100, then we bill $10; if the customer orders over $100, then we bill $15.
  • Use this to create “free shipping on orders over $X: by modifying the schedule.

To simplify the order, I set the default shipping terms on the customer record. This will default the shipping terms on any sales orders that are created for this customer. This is illustrated on the screen shot below.

Setting Default Shipping Terms on the Customer Record

Setting Default Shipping Terms on the Customer Record

I selected the “FlatRate” terms that I created earlier.

Selected FlatRate terms earlier created

Step 1: Create Sales Order

  • Navigate to: Distribution > Sales Orders > Work Area > Enter > Sales Orders.
  • Select a customer (in this case, I selected the one above with the flat rate shipping default).
  • Add appropriate items (in this case, I added between $50-$100 in order to incur $10 in shipping charges).

Shipping Terms on the Sales Order Document

Shipping Terms on the Sales Order Document

Notes

  • Based on the customer, the shipping terms were defaulted to FLATRATE1.
  • Ship via was not set by default but can be specified on the shipping document.

Step 2: Create Shipment

  • From the sales order document, select Action > Create Shipment.
  • Navigate to the “Shipping Settings” tab.

Add the Ship Via information as illustrated below.

Shipping Settings on the Shipment Document

Shipping Settings on the Shipment Document

  • I selected FEDEX GROUND as my ship via service (details of how to configure FedEx Ground services are beyond the scope of this document).
  • The Freight Amt. defaults to $10 per the Shipping Terms specified. Had the terms specified an amount based on actual shipping costs, the amount would remain zero until the shipment was confirmed.

Step 3: Confirm the Shipment

  • Select Action -> Confirm Shipment.

Shipment document after confirmation

Shipment document after confirmation

  • Note that after confirming the shipment, the freight cost is added (in this case it was calculated based on the weight of the package using a medium sized box being shipped from the WHOLESALE warehouse to the customer location specified on the shipping document).

Step 4: Create the Invoice

  • From Shipment screen select Actions -> Prepare Invoice.
  • The results are illustrated below. Note that the shipping amount of $10 was calculated based on our shipping rules.
  • Journal transactions are calculated based on the Posting Settings in the General Settings.

Sales Order -> Configuration > Setup -> Orders Types

Invoice for flat rate shipping and the Associated Journal Transaction

Invoice for flat rate shipping and the Associated Journal Transaction

Note that invoice can be configured to display shipping charges as a line item or below in the summary area.

2. Shipping Amount Based on Cost

Setting up pass-through cost shipping

By default, shipping costs are passed along to customers in Acumatica. In this example, we create a shipping term that defines this explicitly. This is illustrated below.

Shipping term that defines this explicitly

Note: I could have marked up/marked down my shipping costs by selecting a freight cost percentage other than 100%.

Example 2: Sales Order with Cost Based Shipping Charges

Step 1: Create Sales Order

  • Distribution > Sales Orders > Work Area > Enter > Sales Orders
  • Select customer (in this case, I changed the default shipping terms to the CFR shipping option I just created)
  • Add items to ship (in this case, I duplicated the order from the first example)

 Create Sales Order

Step 2: Create and Confirm Shipment

  • When creating the shipment, I selected my carrier as FedEx Ground. I could have done this on the sales order if I wanted to inform my customer of the anticipated shipping charges.
  • After confirming the shipment, the Freight Cost and the Freight Amount are equal.

Create and Confirm Shipment

Step 3: Prepare Invoice

  • From the Shipment screen select Actions -> Prepare Invoice.
  • The results are illustrated below. Note that the shipping amount of $7.81 was calculated based on our shipping rules and the cost of the shipment we received from FedEx.

Prepare Invoice

Appendix: Freight Cost Calculation

In Acumatica, freight costs are calculated based on the location of the originating warehouse and the ship to address of the client.

In examples 1 & 2 above, we calculated $7.81 in freight based on:

  • Package: 2.03 kilogram package in a medium sized box
  • Origin: Wholesale warehouse (Baltimore, MD 21224)
  • Destination: Towson, MD 21286

If we ship the same items to the same customer from a warehouse in CA, the shipping cost is more ($11.87):

  • Package: 2.03 kilogram package in a medium sized box
  • Origin: Retail warehouse (El Segundo, CA 90245)
  • Destination: Towson, MD 21286

Freight Cost Calculation

Note that the freight amount was set to the same as the freight cost because of the selected shipping terms.

Example, Drop Shipment:

I copied the order a third time and set the option to drop ship from a supplier in Portland, OR 97203. The freight calculation is as follows:

  • Package: 2.03 kilogram package in a medium sized box
  • Origin: Warehouse location (as specified in document details area) NOT Vendor location (Portland, OR 97203)
  • Destination: Towson, MD 21286

In the drop shipment example, I could charge the customer based on my vendor location by creating a virtual warehouse that belongs to the vendor. To simplify order entry, I could set a vendor location called “Drop Ship” and point it to my virtual warehouse.

Doug Johnson

Director of Partner Programs and Enablement at Acumatica. Doug is in charge of showing people the specifics about what makes Acumatica’s Cloud ERP software awesome for our customers and partners. For other tips and technical training, stay tuned on Tuesdays.

Subscribe to our bi-weekly newsletter

Subscribe