Additive Freight

Cost in SAP
S/4HANA
In SAP S/4HANA, managing the additive freight cost for semi-finished
goods (SFG) transfers between plants is a crucial process. This
presentation will guide you through the steps involved in accurately
estimating, tracking, and actualizing these freight costs to ensure efficient
logistics and accurate cost accounting.

by Abid Aqeel
Estimating Freight Costs
1 Determine Freight Rates
Research and maintain a database
of freight rates for different lanes
and carriers.
2 Calculate Estimated Costs
Use the freight rates, weight, and
volume of the SFG to estimate the
freight costs for each transfer.

3 Add to Cost Estimate

Include the estimated freight costs in the overall cost estimate for the SFG.
Tracking Freight Costs
STO Creation 1
Freight costs are added to the STO
(Stock Transfer Order) when the SFG
transfer is initiated through purchase 2 Actual Freight Booking
Order The actual freight costs are booked
when the transportation service is
utilized.
Cost Posting 3
The actual freight costs are posted to
the relevant cost elements in the SAP
system.
Actualizing Freight Costs
STO Purchase Order Variance Analysis Month-end Posting

The actual freight costs are Any difference between the The actual freight costs are
added to the STO purchase estimated and actual freight posted to the relevant General
order, which is then used for costs is analyzed and Ledger accounts during the
the final cost settlement. reported as a variance. month-end closing process.
Benefits of Accurate Freight Cost
Management
Improved Cost Visibility
Accurate tracking and actualization of freight
costs provide better visibility into the true
cost of SFG transfers.
Reduced Freight Costs
Continuous monitoring and optimization of
freight costs can lead to significant long-term
savings.
Enhanced Decision-making
Detailed freight cost data enables more
informed decision-making on logistics
strategies and supplier selection.
Accurate Costing
Incorporating actual freight costs into the
SFG costing ensures more precise product
pricing and profitability analysis.
Challenges and Considerations
Data Accuracy
Ensuring the accuracy and
timeliness of freight rate
data and actual freight cost
information.
Process Integration
Integrating the freight cost
management process with
other logistics and
accounting functions in SAP
S/4HANA.
Stakeholder Alignment
Aligning the expectations
and requirements of different
stakeholders, such as
logistics, finance, and
procurement teams.
Best Practices for Effective
Implementation

Maintain Automate Cost Robust Reporting Collaborative

Freight Rate Calculations Approach
Implement detailed
Database
Regularly update and Leverage SAP reporting and Foster cross-
maintain a S/4HANA's analytics to track functional
comprehensive functionality to freight cost trends collaboration between
database of freight automate the and identify logistics, finance, and
rates for different calculation and optimization procurement teams to
lanes and carriers. posting of freight opportunities. ensure efficient
costs. freight cost
management.
Conclusion
Effective management of additive freight costs in SAP S/4HANA is crucial for maintaining accurate cost
accounting, enhancing decision-making, and optimizing logistics operations. By following the best
practices outlined in this presentation, organizations can achieve greater visibility, control, and cost
savings in their SFG transfer processes.