• From: USA
  • Registered: 02/05/2018
  • Posts: 37

Topic: Shipping with FA

I am trying to determine if/how FA handles freight expense.  Here's what happens in real life and what I'd like to do in FA:

I use an online freight consolidator (a branch of the US Postal Service); I prepay for postage and execute the shipment online.

I want to do a JE for the prepaid postage expense and bank account transaction in FA, then consume the postage expense each time I ship a sales order. 

I see where I can setup shipping companies but that appears to be for reference only on invoices.

I was expecting to find a stand alone shipping function within FA but I don't believe it's there.

I'm using FA version 2.3.19

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,160

Re: Shipping with FA

You can upgrade to FA 2.3.26 first and see if this issue is resolved in it. This will also make you ready for moving onto FA 2.4.x later.

Have you tried Quick Entries?

Attached are the changed files from FA 2.3.19 to FA 2.3.26.

Pay attention to the sql/en_US-new.sql and config.default.php file changes and implement those in the latter in your config.php file. Also read each release page in the forum for any other changes / sql data changes.

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  • From: USA
  • Registered: 02/05/2018
  • Posts: 37

Re: Shipping with FA

Thanks.  I will do the upgrade and see if it helps.  I'll also see if Quick Entries is a good solution.

It seems odd that FA does not have a Shipping product to complement the Sales, Inventory and Manufacturing functionalities currently present is the software.  Companies that make products certainly need to ship them.

Can you help me understand why this is? 

Perhaps the shipping solution I've described was part of a version enhancement later than my current version?  I don't think so because the FA web page doesn't list SHIPPING under the Products tab.

  • From: USA
  • Registered: 07/16/2017
  • Posts: 276

Re: Shipping with FA

Perhaps setup prepayments to the freight consolidator as an Asset account (Prepaid Shipping), then change your FA G/L setup Shipping Charged Account to Prepaid Shipping, so that when you enter the FA invoice, the Shipping field uses the Prepaid Shipping account.

If you have multiple shippers with different g/l accounts, you would have to create Service items (e.g. Fedex, UPS, Prepaid USPS, etc) rather than using the provided Shipping field.

If you are offering free shipping, then you would not put any shipping on the sales order, but use a separate JE each time you ship a sales order.   As far as I can tell, there is no way for FA to tie the two together (ie. offer free shipping on the FA sales order and expense it elsewhere).

  • From: USA
  • Registered: 02/05/2018
  • Posts: 37

Re: Shipping with FA

Thanks for the suggestions.  I am currently using the Shipping field on Sales orders to capture freight revenue, just as intended. 

Won't the amount of the Service type inventory item (Prepaid USPS), when used on the Sales Order, be added to the subtotal?  I assume it will because the algorithm will simply treat it as a product being sold to the customer, which in this case it is not.

Looks like I'll have to make a separate JE to capture the freight expense.

Once again, so strange that FA does not provide a straight forward way to create a shipping service provider, ship product, maybe print labels, and record the relevant expense transaction.

  • From: USA
  • Registered: 07/16/2017
  • Posts: 276

Re: Shipping with FA

By using the Shipping field on the sales order, the customer is charged for the shipping.   This is no different from using a service item and adding it to the sales order.  Conceptually, shipping is a service that is being offered to and then paid by the customer.

As I said, the only reason I can see to use a separate JE is if the customer does not pay for the shipping.

  • From: USA
  • Registered: 02/05/2018
  • Posts: 37

Re: Shipping with FA

Thanks.  It helps to talk this through and I really appreciate the feedback. 

It's really pretty straight forward: somehow I have to record the shipping expense to the GL, which will be partially offset by Shipping & Handling revenue flowing from sales orders. 

I was hopeful that I could book the expense as part of the SO processing transaction.  When I couldn't find a shipping function, I was hoping to see a field in the Delivery Against Sales Order routine that would allow me to enter the freight expense associated with the sales order deliver.

The freight amount charged to the customer is usually not the same as the amount charged to me by the freight carrier.

The shipping amount charged to the customer will be booked as a revenue.  The JE that I make will book the freight charges from the carrier as an expense (COGS).  The revenue will offset part of the expense.

  • From: USA
  • Registered: 07/16/2017
  • Posts: 276

Re: Shipping with FA

If you are prepaying freight, it is really an asset account, it is not an expense or cogs at the time you purchase the freight, because the customer transaction has not yet taken place.

I go back to my first suggestion: make a Shipping and Handling a G/L Asset account instead of a Revenue account.    A sales order with shipping will credit this account and purchasing freight will debit this account.  You won't have any revenue or expense in this scenario.

In the more usual scenario, the customer pays for freight up front, generating revenue.   Later, the carrier bills the sender, generating an expense.

cogs is another issue entirely, used for freight in when you are purchasing items to resell.

  • From: USA
  • Registered: 02/05/2018
  • Posts: 37

Re: Shipping with FA

This is making sense.  Finally! right!?

But won't this approach mess with the accurate reporting for income and expenses?

Accounting is by no means a strength.  Just want to make sure that I'm not goofing the bookkeeping. 

Thanks again for helping understand things.

  • From: USA
  • Registered: 07/16/2017
  • Posts: 276

Re: Shipping with FA

To see what FA does, create a dummy company, and play around with some ideas.   Look at the reports, balance sheet, p/l, g/l entries and convince yourself how everything will look before using it on live data.