Delivered pricing

Delivered pricing refers to a sales price that includes the cost of freight as part of the value. This is useful when the seller is responsible for arranging the transportation of items to a customer's location. Because the seller knows the cost of freight at the time of sale, it is possible to factor this amount directly into the sales price. If, on the other hand, the customer is responsible for transporting purchased items from a seller's facility, or the cost of freight is not known at the time of sale, keep the cost of freight separate from the listed unit price of the sold items.

When entering the results of a sale in the general ledger, the cost of freight is typically not recorded to the same revenue account as the actual value of the sold items. Therefore, while it is desirable to present a single unit price to the customer, from a financial perspective it is necessary to distinguish between these two values.

Delivered pricing configuration

When freight charges are included in the sales price of items, they are added to each existing line on a sales document. However, a company may not want to calculate these freight charges at the document line level. For example, the per-unit rate applied to each item on a sales order may be based on the total quantity or weight of all items.

Start delivered pricing in the Delivered Pricing Calc. Method field on the Sales & Receivables Setup page. In this field, indicate whether freight charges should be calculated for individual document lines or based on the document as a whole.

The freight charges added to the price on a sales line are calculated according to a codeunit developed specifically for this purpose. This lets a company determine its own business rules for freight charge calculation and then create a codeunit that incorporates this criteria. Once developed, assign this codeunit in the Del. Pricing Calc. Codeunit ID field on the Sales & Receivables Setup page.

When creating a codeunit, take the calculation method into account, as this setting could affect how the codeunit is developed. For example, if a company wants to calculate freight charges at the header level, a developer can create a codeunit that instructs the program to view all existing sales lines on a document when calculating freight.

FOB pricing

Once a calculation method is selected and a codeunit assigned, delivered pricing applies globally to all sales activities. In some situations you may not want to include freight on a sales order. You can do this using the FOB (Free On Board) pricing feature. When FOB pricing is activated, the program does not calculate any freight charges for the items on a sales order, and only the standard sales price is used.

You can indicate that FOB pricing is always permitted for a customer by selecting the FOB Pricing field on the Invoicing FastTab of the customer card. This setting acts as the default for a corresponding field on the Invoicing FastTab of the sales order. If necessary, you can also turn FOB pricing on or off for individual sales orders by changing this field.

Freight calculation

Freight is calculated for every line on a sales document according to the assigned codeunit. The freight amount is added to the unit price on the line, resulting in a single amount that incorporates both the item's initial sales price and the additional freight charge. Separate columns break down this value by displaying both FOB and freight amounts.

When calculated at the document line level, freight is automatically added to each line as it is created. If changes are made to a line (for example, an adjustment to the quantity) the freight amount is automatically updated.

You cannot automatically determine freight if calculations are performed at the header level. This is because the information on each sales line may affect the freight amounts calculated for all lines. When all items have been entered on the sales lines, calculate the freight charge for the entire sales document by choosing Actions, pointing to Functions, and then choosing Calculate Freight. If changes are made to the sales lines that affect the calculated freight charge, perform this activity again.

You can instruct Dynamics NAV to automatically calculate freight for a sales document as part of another activity. Selecting the Calc. Freight on Release/Post field on the Sales & Receivables Setup page instructs the system to automatically calculate freight amounts whenever a sales document is released or posted.

At any time, you can manually change the calculated freight charges on a sales line. However, once a freight charge has been adjusted manually, the program no longer updates it if any changes are made to the sales order. If you have manually changed a freight charge and want to recalculate the amount according to the assigned delivered pricing codeunit, choose Actions, point to Functions, and then choose Calculate Freight.

Freight charge posting

One of the major benefits of delivered pricing is that freight charges are incorporated into an item's sales price, resulting in a single amount presented to the customer. For accounting purposes, however, it is necessary to keep the initial sales price and freight amount separate from each other.

When a sales order is posted, any freight charges are entered in a different G/L account than the standard account to which sales revenue is recorded. Specify this account in the Sales Account (Freight) field on the General Posting Setup page. Enter a freight account for every specific combination of general business and general product posting group used on sales orders. You cannot post a freight charge assigned to a document line if these accounts are not properly set up.

While freight is posted to a separate G/L account, the posting process itself is no different for freight than it is for the rest of the sales line.

Freight charges also post to the associated value entries. The same breakdown of FOB and freight amounts present on sales lines is also provided for value entries.

To	See
Learn more about how to start delivered pricing.	How to: Activate Delivered Pricing