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.