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How to Reconcile Freight in Transportation Management Using Dynamics 365 Supply Chain Management
Posted on: August 29, 2022 | By: Hope Jin | Microsoft Dynamics AX/365, Microsoft Dynamics Manufacturing
Accurate freight reconciliation becomes more crucial than ever as inflation continues to set in. Reconciliation software such as Microsoft Dynamics 365 for Supply Chain Management can help automate freight reconciliation tasks. Using technology such as this can help minimize strain on resources and improve accuracy. Freight reconciliation in Dynamics 365 can be done manually, or it can be set up to occur automatically. This blog will go into more detail about the freight reconciliation process.
Freight rates are calculated by the rate engine that is associated with the relevant shipping carrier. When a load is confirmed, a freight bill is generated, and the freight rates are transferred to it. The freight rates are apportioned as miscellaneous charges to the relevant source document (purchase order, sales order, and/or transfer order), depending on the setup that is used for the regular billing process. The freight reconciliation process (which is also known as the matching process) can start as soon as the freight invoice arrives from the shipping carrier. The invoice can be received electronically or on paper. If the invoice is received on paper, you can generate an electronic invoice by using the freight bill as a template.
If you’re reconciling freight manually, you must match each invoice line with the freight bill line or lines for the load that is being invoiced. You do this matching on the Freight bill and invoice matching page. If the amount on the invoice line doesn’t match the freight bill amount, you must select a reconciliation reason for the difference. If there are multiple reasons for reconciliation, you can split the unmatched amount across them. The reconciliation reason determines how the difference amounts are posted in the general ledger. When the reconciliation of the whole invoice amount is accounted for, it’s submitted for approval, and then the journal is posted.
To use automatic reconciliation, you must specify the schedule for reconciliation, and the invoices and shipping carriers to use. The matching of the invoice lines and freight bills is done according to the setup of the audit master and freight bill type. After you run the automatic reconciliation, you must handle any invoices that the system can’t match. You must then process these invoices manually before you can post all the invoices for payment.
Match freight bills with freight invoices using automatic or manual reconciliation
Matching is the process of finding the freight bills that correspond to each freight invoice. This can be done by matching the invoice lines one-by-one (manual matching), or by matching all available invoices at once (auto matching).
When matching multiple freight invoices to the same freight bill, the process for auto matching works as follows:
- All freight invoices not matched are sorted by amount, with largest amount first.
- The freight invoices are matched one-by-one, until the freight bill has no positive amount remaining.
- Depending on the setup of the audit master and the remaining amount on the freight invoices, the remaining amount is set.
All freight bills with positive amounts will be available for matching. Similar to auto matching, the user will only be able to match freight invoices with negative amounts to freight bills not fully matched.
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