Transportation management freight invoices example in AX 2012 R3

This post is the last of a series. I started using automatic miscellaneous charges to estimate the landed cost for purchased items, here. Then I went one step further and used the Dynamics AX 2012 R3 Transportation management module to assign freight charges on a vendor-by-vendor basis here. Finally I posted an actual freight invoice against the inbound load here. But if you read that last post, you’ll realise that it was a very simplistic example – one purchase order, one load, one charge and one invoice.

I’m not going to repeat all of the content in the previous blogs, but I’m going to try to make this post a more realistic example. Firstly, the route assigned to the inbound load has three separate charges from three vendors (Ocean freight, Port charges, and Local freight):

And this has generated miscellaneous charge codes which have been added to my purchase order lines:

I could use that zero charge port line for an unexpected charge like demurrage.

When I received the purchase order I went to the Load planning workbench from the purchase order line and confirmed my inbound load:

Then I went to Related information > Transportation > Freight bill details

The system shows me the Freight bill details from my selected load:

Incidentally I can see these un-matched Freight bill details on a ‘Periodic’ form (which is actually an Inquiry), Transportation management > Periodic > Unmatched freight bills:

Back on the Freight bill details form, I could click on ‘Generate freight bill in…’ to generate a Freight bill invoice, but a more realistic scenario is that one of my vendors is going to send in an invoice, and it’s going to relate to more than one load, and it’s going to be for slightly more (or less) than my estimate. So let’s head over to Transportation management > Inquires > Freight invoice details and create the vendor’s invoice:

All I need on the header is the Shipping carrier / Vendor account; their invoice number and date. Then I add their invoice lines

And click on ‘Match freight bills and …’:

Now I’m selecting a vendor invoice line, and a freight bill line and ‘Match’, and repeat on the second line. I’ve got one line over and one line under.

The ‘under’ line shows up as an Unmatched freight bill line, I need to ‘Discard’ the un-matched Amount remaining:

When I click ‘Discard’ the system displays the Freight bill reconciliation form:

The Reconciliation reason code will tell the system which accounts to Debit/Credit (Transportation management > Setup > Freight reconciliation > Reconciliation reasons):

When you click OK on the Freight bill reconciliation form the Freight bill line disappears from the Unmatched freight bills list grid.

The ‘over’ line is reconciled when you click on ‘Submit for approval’:

Now we get a Reconcile invoice form (with the same Reconciliation reason codes). In this case you’ll probably choose a code which has ‘Pay the vendor’ ticked, and then you click OK.

As before, because I have no workflow setup, although the message says ‘The invoice has been submitted successfully’ – the system’s actually created two Accounts payable Invoice journals. First there’s the amount I ‘discarded’ from the Freight bill line:

And then there’s the Invoice journal for the Vendor Invoice I entered and matched to the Freight bill lines:

It may seem a bit un-wieldy at first glance but there’s a lot of useful functionality here just waiting to be deployed.

Transportation management freight invoices for landed cost in AX 2012 R3

If you’re one of the select band of followers to this blog you’ll realise that this post is one of a series. I started with a simple setup for automatic miscellaneous charges based on a scenario where we wanted a high-level estimate of freight charges applied to purchased items, here. Then I went one step further and used the Dynamics AX 2012 R3 Transportation management module to assign freight charges on a vendor-by-vendor basis here. That post ended when I confirmed the inbound load, which added the route estimated freight charges to the purchase order lines as miscellaneous charges. Now we’re going to post an actual freight invoice against the inbound load.

So just like all those series on TV we’ll start with a “previously on timsaxblog” section.

We created a purchase order, created a load, assigned a rated route to load, posted a purchase order receipt and confirmed the load. So on our purchase order we can see the miscellaneous charges:

And we have a load:

OK. That was last week. Roll the credits and let’s get on with this week.

Now we create a Freight bill invoice from the load. If you’ve already navigated to the load you want the Transportation action pane. If you need to navigate to Transportation management > Common > Loads > All loads, you’ll have to tick ‘Show closed’ before your confirmed inbound load will be shown:

When you click on the button the system prompts you to enter a vendor invoice number – enter it if you have the vendor invoice to hand – but you can leave it blank.

Then when you click OK the system creates a Freight bill invoice:

The system’s taken you to the form which can be found at Transportation management > Inquires > Freight invoice details.

The next step in the process is to update the Freight bill invoice with the carrier’s freight invoice number (if you haven’t already done that). Then the freight invoice is matched with the freight bill. After the matching process, if the amount in the freight bill and freight invoice is same, the freight invoice is matched and submitted for payment approval. If there’s an unmatched amount, this is reconciled before submitting for payment approval.

To match the freight invoice lines with the freight bills go to Transportation management > Inquiries > Freight invoice details (shown above).
In the Freight invoice details form select the freight bill invoice, and then click ‘Match freight bills and …’ to open the Freight bill and invoice matching form:

Select your un-matched lines and click match:

The system moves the lines to the Matched freight bill details fast tab:

(You’ve got a handy Un-match button there).

When you’re ready, click on the ‘Submit for approval’ button. I don’t have a workflow setup, so although I get a message saying that the invoice has been submitted:

When I get back to the Freight invoice details form I can see that it has been approved.

But wait, there’s more, the system’s created a vendor payment journal for the freight invoice:

I can now click on the ‘Vendor invoice journals’ button to get:

And on that form, the ‘Journal details’ button gives me:

Of course these are the payment journals you normally enter at Accounts payable > Journals > Invoices > Invoice journal.

Now this is a particularly simplistic scenario, so in the next post in this series I’ll setup routes with charges from more than one carrier, and post an actual freight invoice for more than one load and which is different from the estimated freight bill. Stay tuned.

Transportation management for landed cost in AX 2012 R3

In an earlier post I looked at a simple setup for automatic miscellaneous charges based on a scenario where we wanted a simple high-level estimate of freight charges applied to purchased items – this post goes one step further and uses the Dynamics AX R3 Transportation management module to assign freight charges on a vendor-by-vendor basis.

I hope you’re sitting comfortably, because there’s a fair bit of setup to make this work.

Setup 1. Transportation management parameters

Transportation management > Setup > Transportation management parameters:

My Transportation management parameters are setup as above.

Setup 2. Load template

Transportation management uses the terminology of Shipments and Loads.

A Load represents an inbound or outbound entity such as a carrier, a carrier’s trailer, or an export container. Typically one or more Shipments will be combined to form a load. A Shipment consists of one or more order lines, which contain item order information.

A load template must be entered when you create a load manually. The load template sets weight and cube limits for the load.

This setup is optional if you create loads automatically (by setting the parameter Loads > ‘Automatically create at purchase order entry’).

Menu path: Transportation management > Setup > General > Load template

Note. You can specify ‘Equipment’ for each load template, but there doesn’t seem to be any relation between the limits on the equipment and the limits on the load template.

Setup 3. Carrier and carrier service setup

Transportation management > Setup > General > Shipping carrier.

As an example I’ve setup a shipping carrier for Ocean Freight:

Any carrier that has the ‘Activate carrier rating’ and ‘Use carrier’ flags ticked can be considered upon rating or routing a given order or load. (By implication un-ticking those flags de-activates the automatic process).

The system allows for a carrier number sequence or pro-number generation. This is the continuous series of numbers assigned by a motor transportation company to successive shipments regardless of the classification.

The Shipping Carrier can also have multiple services defined. Services may be used when setting up the Rate master Rate base assignments – and are entered here

The combination of the carrier and the service make up the mode of delivery, the system generates a Mode of delivery automatically for each Carrier-Service combination. (Sales and marketing > Setup > Distribution > Mode of delivery).

A rating profile is required, even if spot rates are added to the route (as below). The default setup for the Rate engine and Rate master are acceptable if spot rates are used (as below).

Note. I’ve linked my Shipping carrier to a Vendor; added a Mode and Transportation method, and defined a Load template (which is optional).

Setup 4. Delivery terms

Sales and marketing / Procurement and sourcing > Setup > Distribution > Terms of delivery:

Make sure that you’re using a Delivery term which has ‘Add transportation charges to orders’ ticked.

Setup 5. Charge codes

If you’ve read the previous post on automatic miscellaneous charges for landed cost, this setup will be familiar to you.

Accounts payable / Accounts receivable > Setup > Charges > Charge codes:

Setup 6. Transportation management miscellaneous charges.

Now we’re going to link the charge code to the Shipping carrier and Carrier service.

Transportation management > Setup > General > Miscellaneous charges:

Setup 7. Route plan.

The route plan describes the transportation methods, I’m going to setup a simple route plan and later I’ll assign that to a vendor, and I’m using a spot rate to define charges.

Transportation management > Setup > Routing > Route plans

You must enter a shipping carrier and carrier service on each segment if you want to use spot rates to calculate the cost of each segment (as opposed to using a rating engine).

Spot rates can be entered as Pickup charges or Dropoff charges per hub – if you need more charges use Accessorial charges. Accessorial charges aren’t added directly to the route but are assigned by the rate route workbench.

Setup 8. Carrier accessorial charges

Although this setup’s optional – you’re going to need to use it to define realistic costings (where you have multiple carriers, duty, insurance, and customs charges)

Transport management > Setup > Rating > Carrier accessorial charges:

Use the Accessorial assignments button to define new charges:

Alternatively, you can define accessorial charges per Hub at Transport management > Setup > Rating > Hub accessorial charges.

Setup 9. Routing guide

Nearly there. Setup a Routing guide – this tells the system which Route plan to assign to an inbound load.

Transportation management > Setup > Routing > Routing guide

Set Direction = Inbound and your routing guide can be setup for a vendor account.

You specify the Route plan to be used in the Result fast tab.

If your vendor’s delivering to more than one Site/Warehouse then you can specify the Site/Warehouse on the Information fast tab (and assign a different Rout plan in the Result).

Before you go any further, test your setup in the Rate route workbench. Transportation management > Inquires > Rate route workbench:

Enter/Select vendor (if your vendor isn’t shown, add an address to the vendor), and enter/select a warehouse (again, if required, add an address to the warehouse).

Note. If you setup a routing guide for a specific Site/Warehouse you’ll have to enter the Site/Warehouse in the Warehouse pane on the right as well as the ‘To’ address.

The Transit days are calculated by the transit time engine. Simplest setup is to base the transit days on the country and postcode of the origin (vendor) and destination (own warehouse)

Transport management > Setup > Engines > Transit time engine:

Note. This form has been customised to hide un-used fields.

Setup 10. Activate item for transportation management

The last bit of setup is to activate the items. Before items can be assigned to loads and shipments they must be made active for transport management.

Product information management > Common > Released products > Edit

The item must be activated for transportation management before the purchase order line is created.

Now we’re ready to step through the process.

Process step 1. Create a purchase order

Procurement and sourcing > Common > Vendors > Procurement > New > Purchase order:

Don’t forget to check that the Vendor Delivery terms has been set. (This is initial setup – only performed once).

Procurement and sourcing > Common > Vendors > All vendors > Edit:

Process step 2. Confirm purchase order

Purchase order > Purchase > Generate > Confirm:

Process step 3. Create load

Note. This step is automated if the Transportation management parameter Load > ‘Automatically create at purchase order entry’ is selected.

Purchase order > Warehouse management > Load planning workbench:

Load planning workbench > Add > Entire order to a new load:

Assign Load template

Enter/select load template ID:

Click OK.

The system creates a new load and displays it on the Load planning workbench:

Process step 4. Rate the load

Load planning workbench > Rating and routing > Rate route workbench:
Transportation management > Common > Loads > All loads > Transportation > Rate route workbench:

Click ‘Route with rate’.

Click Assign.

The system creates a new Route:

The route can be used to adjust the freight charges for the load.

Process step 5. (Optionally) Review load from purchase order

Purchase order > Line details > Loads:

Process step 6. Update Vessel, Voyage, and Container numbers

The Load header is used to track transport references and dates:

Transportation management > Common > Loads > All loads > Show > Header view:

Note 1. Updating dates on the Load header doesn’t update dates on the purchase order line.

Note 2. There doesn’t seem to be any way of changing the load status

Process step 7. (Optionally) Print receipts list

A receipts list can be printed from the purchase order as a goods inwards check-sheet / put-away document.

Procurement and sourcing > Common > Purchase orders > All purchase orders > Receive > Generate > Receipts list:

Process step 8. Receive goods

The goods inwards process varies from warehouse to warehouse, but ultimately a purchase order receipt is posted.

Procurement and sourcing > Common > Purchase orders > All purchase orders > Receive > Generate > Product receipt:

Process step 9. Confirm the inbound shipment

When the inbound shipment is confirmed the system adds the transportation charges to the purchase order as miscellaneous charges and prevents further changes to the load/shipment:

Transportation management > Common > Loads > All loads > Ship and receive > Confirm > Inbound shipment:

Or Purchase order > Warehouse management > Load planning workbench > Ship and receive > Confirm > inbound shipment:

This adds the freight charge as Miscellaneous charges to the Purchase order lines:

So, a fair bit of extra effort than the auto charges described before in this post but a lot more power and flexibility than that technique.