Cost Distribution for LSPs
As a logistics service provider (LSP), the customer contacts you for a transportation and you create a forwarding order in SAP TM. An organization in your company works with customers to handle order placement and a different organization works with carriers to handle order execution. You use a freight order to execute the transportation service. You use the standard charge calculation and freight settlement processes to settle costs.
You can use cost distribution for external or internal costs in the following settlements:
Forwarding settlements to settle with your external customers
Internal settlements to settle with your internal organizations
When the system calculates internal and external charges in a forwarding order, and the internal and external charge calculation is based on cost pull, it automatically pulls the distributed costs from the associated freight documents, such as freight orders, freight bookings, or service orders. It also uses the distributed cost to calculate the planned revenue in a profitability analysis.
Integration
SAP ERP
The system uses the internal agreement and internal settlement document to integrate with SAP ERP. For more information, see Internal Settlement.
Analysis of Profitability in Forwarding Orders
You can use cost distribution as a prerequisite for analyzing profitability in a forwarding order. For more information, see Profitability Analysis.
Charge Management
You can use the distributed freight cost to settle with your external customers and to settle with your internal organizations. To enable the system to use the distributed freight cost in a freight order or freight booking, you must select a calculation method type of Internal Charge Calculation
and the appropriate cost pull strategy in the relevant calculation sheet. You use the calculation sheet in the agreement between your sales organization and your customer for a forwarding settlement, or between your sales organization and purchase organization for an internal settlement.
When you calculate charges in the relevant forwarding order, the system checks the freight order that executed the forwarding order. It uses the result of the cost distribution you performed on the forwarding order that was executed in the freight order as a basis for the forwarding settlement document or internal settlement document. For more information, see Cost Pull.
Prerequisites
You have performed the following tasks:
Enabled the freight order or freight booking for cost distribution in Customizing for
Transportation Management
under
Freight Order Management
Freight Order
Define Freight Order Types and Freight Order Management
Freight Booking
Define Freight Booking Types
Calculated charges in the freight document
Specified an internal agreement between the purchase organization of the freight document and the business partner of the sales organizations in the forwarding orders. For more information, see Internal Settlement Management.
Specified a forwarding agreement between the sales organization in a forwarding order and the agreement party in the same forwarding order. For more information, see Forwarding Settlement.
Created a forwarding agreement or an internal agreement that contains a calculation sheet in which you have assigned a calculation method type of
Internal Charge Calculation
to a charge type.
The system uses the cost distribution for external and internal costs as a basis for the calculation. For example, you can use this calculation method to calculate the following costs and settlements:
Between the purchase organization in the freight document and the sales organization in the forwarding order
Between the sales organization and the agreement party in the forwarding order
Alternatively, you can use calculation sheets with charge types that are linked to rate tables. You can use the rate tables as the basis for creating settlements. In this case, you do not need cost distribution to calculate internal settlements.
Note
When you use a calculation sheet in which you have assigned a calculation method type of Internal Charge Calculation
to a charge type, the system uses the cost distribution amounts from both your external costs and internal costs. For more information on the internal charge calculation methods see Cost Pull.
You have specified all the prerequisites for internal settlement (see Internal Settlement Management).
You have specified all the prerequisites for forwarding settlement (see Forwarding Settlement).
Example
You are an LSP and you have 2 customers who need to transport cargo.
Organizations
The following table explains the role of the relevant organizations in your company:
Organization | Role |
|---|---|
SalesOrg_1 | Sells services to the customer and the customer places forwarding orders with this organization |
PurchaseOrg_1 | Buys transportation services from carriers to execute freight orders |
Agreements
The following tables give you an explanation of the external and internal agreements that you create to transport the cargo:
External agreements
Agreement | Agreement Type | Organization | Business Partner | Reason |
|---|---|---|---|---|
Cust_Agmt_1 | Forwarding agreement | SalesOrg_1 | Customer_1 | Pay for transportation services in FWO_1 |
Cust_Agmt_2 | Forwarding agreement | SalesOrg_1 | Customer_2 | Pay for transportation services in FWO_2 |
Int_Agmt_1 | Internal agreement | PurchaseOrg_1 | BP_of_SalesOrg_1 (carrier) | Pay haulage cost |
Internal agreement
Agreement | Agreement Type | Organization | Business Partner | Reason |
|---|---|---|---|---|
Int_Agmt_2 | Internal agreement | PurchaseOrg_1 | SalesOrg_1 | Pay haulage cost |
Orders
You create two forwarding orders in SAP TM, with one forwarding order for each customer. The carrier transports the cargo (the carrier is the business partner of SalesOrg_1). In the freight order you have external costs from the carrier.
Cost Distribution
You distribute costs by gross weight. You perform cost distribution at the level of Forwarding Order
in the freight order. The following tables describe how the system distributes costs in the freight order or freight booking:
External cost for the carrier
Base Freight (USD) | Haulage (USD) | Total (USD) | |
|---|---|---|---|
Net amount in document currency | 700 | 300 | 1000 |
FWO_1 | 500 | 200 | 700 |
FWO_2 | 200 | 100 | 300 |
Internal cost for the trailer
Cost of Trailer | Use of Trailer over Distance | Total | |
|---|---|---|---|
Provision of Trailer (USD) | 200 | 100 | 300 |
FWO_1 (USD) | 140 | 70 | 210 |
FWO_2 (USD) | 60 | 30 | 90 |
Internal Settlement with Distributed Costs
FWO_1 and FWO_2 belong to SalesOrg_1. PurchaseOrg_1 performs the following tasks:
Executes the freight order
Pays the execution costs
Incurs the cost of providing and using the trailer
PurchaseOrg_1 uses the external costs it incurred for both forwarding orders to settle internally with SalesOrg_1. The following table describes how PurchaseOrg_1 settles with SalesOrg_1:
External Cost | Internal Cost | Markup Charge | Total | |
|---|---|---|---|---|
FWO_1 (USD) | 700 | 210 | 100 | 1010 |
FWO_2 (USD) | 300 | 90 | 50 | 440 |
More Information
Subject | See |
|---|---|
Create and change agreements | |
Create and change calculation sheets | |
Calculate transportation charges according to a specific logic | |
Manage internal settlements | |
Manage cost distribution | |
Analyze profit | |
Transfer distributed costs from the freight side to the forwarding side, and use the costs as a basis for settling with a customer or an internal organization | |
Create an invoice in SAP ERP | See SAP Library for SAP ERP on SAP Help Portal at http://help.sap.com/erp |
