How do I handle Freight Charges

Q:I have several transactions where we need to include the shipping cost as part of the total charge to the customer.  I am currently inputting 2 transactions one by product and one by account so that the shipping charge does not get added to the profit for the sale.  Is it possible to receive money by item and by account on the same transaction?  This does not seem possible, but maybe I am missing something.

In MoneyWorks you can create a Shipping Item Code that can be used to record shipping charges on invoices where you are recording Items.

If using Gold you set up the item as a Shipping Methods [Red Arrow] Item code like so. Open the Items list (Cmd + 3)  as shown below and click the new icon (Cmd + N).  Assign an Item code that you will easily remember and you can check off that you both Buy and Sell, assigning appropriate Expense or Cost of Goods account to be used when buying (being charged shipping) and an income account to be used when selling (charging) shipping fees. click OK.

In this example my Shipping Item Code when used to record my shipping costs on purchases is being charged to a cost of goods account, other customers might record those charges to Freight expense account. When I charge my customer freight on an invoice, it is revenue and most customers set up an additional revenue account named freight Recovered or the like. The Choice is yours.
In Gold when you use an Item Code that is set up as a Shipping Method, you enter the item in the detail lines of a product invoice like so.
The shipping amount charged  in the default Freight field on the invoice (Product Invoice templates).

in Express and Cashbook a Shipping Item acts the same as a regular item and will appear in the detail area of the invoice.

As for your margin, charging for shipping is revenue and is part of the  margin calculation on the sale, see the bottom of the invoice above.

The cost of the 10 Widgets sold is 410.000 each or $100. They were sold for $22.00 each or a total of $220.00 so the margin in dollars for the Widgets was $120.00 plus the $20.00 for shipping or 58%.

If your Shipping fees were always the same cost regardless of how much you were shipping and how far you were shipping them, you could assign a cost to the Shipping Item and know instantly what the exact margin of the sale was. However that is not possible in the real world, so customers record the revenue from Shipping to a separate account, Freight Recovered in this example and when they pay their shipping bills they record those costs against a Freight, Cost of Goods Sold account or Operating Expense account. The effect of the freight income less freight cost is reported in your income statements (P&Ls).

For more information about MoneyWorks Support in Canada, in the USA, or in the UK contact www.moneyworkssupport.wordpress.com

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