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Author's profile photo Atul Arvind Gokhale

Flexible Transportation Cost Allocation for Shippers with SAP S/4HANA TM

During the SAP S/4HANA Transportation Management implementation (here we focus on the Shipper and not the LSP usage of solution), we are always confronted with the most common question, which is “What is the Treatment for Transportation Cost from financial and controlling point of view?”. In this blog I would like to summarize how the Transportation Cost is posted into Finance & Controlling and which all variations are covered and which all variations are possible via enhancement.

One should note that LE-TRA and S/4HANA Transportation Management work differently.

From a process perspective Transportation Cost is a “cost” in relation to the “Cargo” being transported. Which in turn means the Inbound or Outbound deliveries which are included into the Freight Order. To be more specific, the line items “Material” of the deliveries.

Carrier executing the transport will submit the invoice and must be paid. At the same time the proportionate appropriation of the cost must reflect in the Controlling. To achieve this the financial integration of Transportation Cost has 2 parallel running processes (6a and 6b) as shown in the Financial Integration Flow below:


Financial Integration Flow

S/4HANA Settlement Management functionality allows Transportation Management to do the necessary financial postings to associate the proportionate transport cost to the ERP elements as expected by the ERP processes.

Let’s take some processes into consideration.


Logistics Processes and Freight Cost Treatment

Apart from the above baseline ERP scenarios, there are some more expectations during implementations. Some are listed below


Customer Expectations

Financial Postings initiated by Transportation Management


Postings for Inbound Transportation Cost


Postings for Outbound Transportation Cost

MM Account Determination (T-code OBYC) is the driver behind the above postings where SAP TM makes use of transaction keys like KBS, BSX, PRD, FR1, FR2, GBB and WRX.

So what can be achieved without and with enhancements?


Enhancement possibilities

Enhancements if done are done primarily in the Transportation Management API to S/4HANA Settlement Management module. There are many Business Add-ins provided in the S/4HANA Settlement Management module which come very handy.


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      Author's profile photo Gaurav Jain
      Gaurav Jain

      Thanks for sharing , it is quite Crisp and clear.

      Any plan to clarify it further in case of:

      - Intercompany transfers ( Where one leg is managed by sending company and other leg by receiving company).




      Author's profile photo Ananth Bhat
      Ananth Bhat

      Hi Gaurav,

      this can only be supported with S/4 HANA Version 2022 FPS1 and above with Advanced Intercompany Sales and Advanced Intercompany Stock Transfer processes.  for more details kindly see this link

      and then the Freight Settlement aspects for such process

      for the Older version of Intercompany process Kindly see the Note 2135627

      and especially the reference to the note 2146545


      Best Regards


      Product Management SAP TM

      Author's profile photo Seetharam Mankal
      Seetharam Mankal

      The article needs to mention if CKMLCP (Actual Costing) is needed to absorb the freight cost to individual materials. I need to know if materials managed with Moving average price in S4 can also absorb the freight cost allocated in settlement module.


      Controlling Consultant