Charge Correction Advice Management

The charge correction advice process enables you as a logistics service provider (LSP) to create a charge correction advice document (CCAD) to correct errors in invoices that you have received from a carrier for delivering air freight transportation services.

The process enables you to simulate in the SAP Transportation Management (SAP TM) system the invoicing process that takes place externally between you and a carrier in the Cargo Accounts Settlement System (CASS). The CCAD enables you to post corrections to the freight settlements that you receive from your airline carrier.

You can settle an invoice that contains charges for shipments, and corrections for errors from a previous invoice. For example, you receive invoices from your carrier at the end of each month. After you settle an invoice for the month of July, the carrier contacts you saying there was an error on a particular invoice. You paid for the transportation of a particular item that weighed 50 kg. The actual weight of the item was found to be 75 kg. You agree with the carrier to pay the extra amount due, for the extra weight. At the end of August, the carrier sends you a revised invoice that contains the corrected amount due for the extra 25 kg from the invoice in July.

Process

The carrier provides the air freight service for an air freight booking. You create a freight settlement document (FSD). This is the planned invoice from the carrier, and simulates the invoice that the carrier creates in an external system for the service.
You transfer the settlement document to SAP ERP.
The life cycle status of the FSD changes to Accruals Posted. In SAP ERP, the system creates a purchase order (PO) for the settlement document. The amount of the PO and the total amount in document currency in the settlement document match. The SAP ERP system also creates a service entry sheet (SES) entry for the charge item amount in SAP TM.
In SAP ERP, you verify the invoice from the carrier and pay the settlement amount.
After a short period of time, the carrier contacts you with a correction. The correction could be due to different reasons, such as an error in the weights, or incorrect rates.
You navigate to the relevant air freight booking and make the correction. For example, you change the weight of the item from 100 kg to 120 kg. You create a CCAD for this from the air freight booking.
The CCAD contains the amount that has already been settled, the new delta amount to be corrected, and the final correct settlement amount for the freight booking.

Note
The CCAD is a new category that you can specify in an FSD. You can only create a CCAD for an air freight booking that has an associated FSD that is at a life cycle status of Accruals Posted.

End of the note.
You transfer the CCAD to the SAP ERP system. The SAP ERP system creates a new PO with the following details:
- PO lines for the amounts that were previously invoiced, with the Reverse Indicator enabled
- SES lines for the amounts that are newly determined in the CCAD
SAP ERP posts return SES amounts for the PO lines, with the Reverse Indicator enabled. This posts returns for the previously invoiced amount. SAP ERP also posts a new SES entry for the fully adjusted correct amount. The life cycle status of the CCAD in SAP TM changes to Accruals Posted.

Example

The following table illustrates how the CCAD process works for an air freight booking:

Step in SAP TM	Amount in FSD/CCAD (USD)	Step in SAP ERP	Comment
Total freight cost in air freight booking	2400	None	None
Generate the FSD	2400	PO created, for example, PO1 with line 10. SES created, for example, SES 1. Linked to PO1/10 with amount USD 2400	Regular FSD process
Update the booking to reflect the correction, for example, weight correction. New total freight cost in air freight booking	3000	None	None
Generate a new CCAD	600	No change to PO1, created in step 1 PO2 has the following items: Item 10 for USD 3000 reflecting the new changed amount Item 20 for USD 2400 with returns indicator selected SES 2 created for PO2/10, for USD 3000 SES 3 returned for PO2/20, for USD 2400	SAP ERP posts a return for the old invoice amount of USD 2400. It also posts the new amount of USD 3000.

The following table illustrates how the CCAD process works for an air freight booking, where the process results in negative amounts:

Step in SAP TM	Amount in FSD / CCAD (USD)	Step in SAP ERP	Comment
Total freight cost in air freight booking	2400	None	None
Generate the FSD	2400	PO created, for example, PO1 with line 10. SES created, for example, SES 1. Linked to PO1/10 with amount USD 2400	Regular FSD process
Update the booking to reflect the correction, for example, weight correction. New total freight cost in air freight booking	2000	None	None
Generate a new CCAD	-400	No change to PO1, created in step 1 PO2 has the following items: Item 10 for USD 2000 reflecting the new changed amount Item 20 for USD 2400 with returns indicator selected SES 2 created for PO2/10 for USD 2000 SES 3 returned for PO2/20, for USD 2400	SAP ERP posts a return for the old invoice amount of USD 2400. It also posts the new amount of 2000.

More Information

Freight Settlement

Management of Air Freight Bookings for Airlines