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Author's profile photo Sanjeev Kagolanu

Internal settlement of freight charges in SAP TM 9.5 for shippers

Internal settlement of freight charges in SAP TM 9.5 for shippers

-By Sanjeev Kanth Kagolanu (Jeevs) – Senior SAP TM Consultant- IBM India Pvt. Ltd



What is this blog post about and where it helps?

Recently in one of our implementations, we had a business requirement where the transportation planning happens for one company, where the actual transportation takes place in a different region and company, but paid by the other company within the same organization. Although this is a standard process in SAP TM, the importance of the same is not fully appreciated and implemented fully in many cases. This blog aims at bridging that gap to make understand the real business need and then gives details of configuration and master data that needs to be set in SAP TM 9.5


In transportation business, there are a lot of business cases when internal settlement of the freight charges is required.

We have Logistics service providers who have offices in different regions with local offices, companies which are part of the Global organization. But each local office or company in a region is more likely working as a mini organization in its own terms acting as a profit center for the group.

Even in case of shippers as in case manufacturing companies, some have their own transportation companies/trucking companies, some even own or lease cargo planes and even ocean vessels and containers. And even if the manufacturing company does not own any trucks, they operate in different countries/regions. So, when a company ships product from country X to Y. And the next leg of shipment from country Y to Z is arranged by the local company of the same global organization, there can be requirement that these freight charges for transportation from Y to Z are paid by the local company but internally settled with the internal company which actually needed this to be transported.


There are two types of internal settlements at a broad level.

One is ‘Intercompany internal settlement’ which happens between a sales organization and purchase organization belonging to two different companies of the same global organization.

Second is ‘Intracompany settlement’ which happens between a sales organization and purchase organization belonging to the same company.

By default, in TM an Intercompany settlement document is created. This means SAP TM calculates the charges for the internal settlement when the company code of the planning and execution organization in a stage is different to the company code of the sales organization in the associated forwarding order.

However, we can also do an intracompany settlement when it creates an internal settlement document. This means that the planning and execution organization in a stage matches the company code of the sales organization in the associated forwarding order.


  • Many of the companies using TM in shippers scenario have a need for internal settlement of the freight charges. They prefer to avoid this scenario by doing transportation planning separately by different organization and incase need to invoice the internal organization or department they do it outside the system which is a manual process and overhead.
  • Using Internal settlement process for freight charges in SAP TM, we not only automate the internal settlement of freight charges between the internal departments/companies of the global organization, we also provide a seamless process for the planners who can plan any shipment based on the efficiencies of business rather than worrying about how the internal settlement and communications happen.

Internal settlement in case of Shippers



Internal settlement in case of LSPs



Use Case – Intracompany Internal settlement process for shippers using own resources

In the following steps we will see how we set up intracompany internal settlement process in case of shippers scenario using own resources.

System Requirements: SAP TM 9.5 side car with ECC, S/4 HANA. Also applicable for SAP S/4 HANA 1909 with some adaptions that may be needed.

Step 1:

In this scenario we have a purchasing organization and a forwarding house under the same company.

This is defined under the Organization and staffing in SAP TM.

We need to maintain the business partner details for the respective organizations. Further at the company level, we set the check box for ‘Intracompany settlement’.

In the Forwarding house which is the sales org. on the ERP sales order, but actually purchase org. on the TM side for freight services, we maintain charges profile corresponding to Internal charges.

  1. We maintain the settings for Stage profile and enable internal charge calculation, internal settlement and maintain ISD type.

  1. The stage profile needs to have the correct rule for creation of Internal settlement document.

  1. In the freight order type enable internal settlement, internal charge calculation and enter internal settlement document type
  2. Maintain charges profile with the internal settlement profile under ‘Set. Prof.’ and the freight settlement under Freight .Settlement Profile

  1. Create calculation profile for freight settlement and internal settlement

In this case I’m using the same charge type for both the calculation of carrier related charges as well as internal charge calculation.

  1. Create Internal settlement profile under category ‘forwarding settlement’

  1. Create internal settlement document type of category ‘Internal settlement’

  1. In the BP of the partner corresponding to purchase organization, maintain sold to party role and enter the sales organization under the customer org. data ; Maintain the internal settlement profile and the charges calculation profile.

  1. In the vehicle resource that is owned by the forwarding house (based on business reasons, this could be subcontracted too), maintain the sales org. as the forwarding which is going to execute the shipment.

  1. Create/maintain internal agreement type
  2. Create an internal agreement and enter ‘Resource’ under the field Resource.

Maintain the internal agreement between the business partner corresponding to the purchase organization and the forwarding house.


Internal freight agreement with resource

  1. ERP/ECC settings for internal charge settlement

IMG–> Integration with other SAP components –> Transportation management –> Invoice integration

Maintain the charge categories, subcategories, charge types.

Map the charge category, subcategory, charge type to cost element.

Map the purchase org., purchase group, controlling area to either internal order or cost center

Map the sales org, sales office, sales group to controlling area, internal order, cost center.

Assign the SD condition type to the TM charge type in case of Intercompany billing document to be created and specify the sales order type, item category and billing type and procedure to be used for this scenario.



This blog post sums up the concept of Internal settlement of freight charges with internal resources and how this is set up in SAP TM.

In the upcoming blog post on the same topic, I would post the process steps in SAP TM for Internal settlement with Internal resources.

For more information, you can comment on my post. If you like the post please share the same.



Below are few of the OSS notes and KBAs that will be helpful while setting up the internal settlement process. There are some bugs or issues for which OSS notes need to be applied too.

References to KBA and OSS

OSS 2882158 – ‘Button to Create Internal settlement document missing’

KBA- 2443338 – 2443338 – How to set-up Internal Agreement for Group Logistics Scenario

OSS 2371928 – 2371928 – Internal settlement from FO

SAP Note: 2344085 – 2344085 – Internal charges calculation error in the Forwarding Order of SAP TM

2478422- Error ‘Settlement profile not found for sales organisation or BP’ during creation

2498535 – How Ready for Invoicing flag is set for OTR/DTR in the Group Logistics Scenario?

2444095 – How to Create an Internal Settlement for OTR/DTR in SAP TM

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      Author's profile photo Ranjeet Singh
      Ranjeet Singh

      Thank you Sanjeev Kagolanu . I'm working on a similar requirement in my project. Your post gave most of the information and configuration I was looking for.

      But can you try and provide details about Internal settlement of freight charges in case of LSPs? That would be helpful really.



      Author's profile photo Alexander Gradl
      Alexander Gradl

      Thank you very much Sanjeev Kagolanu for this good post.

      To be complete, do you have a blog or configuration guide for the erp side, what settings have to be done?

      Kinde Regards


      Author's profile photo Suresh Verma
      Suresh Verma

      Sanjeev Kagolanu Thanks for the document it's great. Can you please help with the user process steps flow for both scenario Shipper & LSP.