• 5 minutes

If you need to track purchase amounts in addition to line items, you can use charges codes. For example, you might pay freight and insurance on a purchase order, and these amounts might be itemized separately on the purchase order.

You can specify whether these amounts are posted to expense accounts, or whether they are added to the cost of the items. This unit explains how to configure accounts payable charges.

Define auto charges

You can automatically apply charges to a purchase order, if, for example, a vendor is located outside a specific vicinity. Automatic charges, which are referred to as auto charges, are applied automatically when you create a purchase order. You can define auto charges for specific vendors, items, or groups of vendors. You can also define auto charges that apply to all vendors, customers, items.

The actions that are available on the Auto charges page depend on where you access the page from.

1. Select Accounts payable > Charges setup > Automatic charges.

2. Select New to define a new auto charge.

3. In the Level field, select the level to apply the auto charge to from the following values:

   • Header - Applies charges to the order header.
   • Line - Applies charges to the order lines.

4. Select an account in the Account code field.

   • Table - To assign charges to a specific vendor.
   • Group - To assign charges to a miscellaneous charges group.
   • All – To assign charges to all vendors.

5. In the Vendor relation field, select a specific vendor if you selected Table, or select a vendor charges group if you selected Group.

6. In the Item code field, select an item code. You can select an item code only when you define auto charges at the lines level. If you select Table, the system assigns charges to a specific item, Group assigns charges to an item charges group, and All assigns charges to all items.

7. In the Item relation field, select a specific item if you selected Table, or select an item charges group if you selected Group.

8. Expand the Lines FastTab to define the charges and the charges rates to use when the current auto charge is applied.

9. In the Currency field, select the currency to use to calculate the charge.

10. In the Charges code field, select the code for the charge.

11. Specify how to calculate the charge in the Category field and enter a value in the Charges value field.

    The following options are available in the Category field:

    • Fixed – The charge is entered as a fixed amount on the line. Fixed charges can be used on charges in the order header and on the order lines.
    • Pcs. – The charge is based on the unit. These charges can be used only on order lines.
    • Percent – The charge is entered as a percentage on the line. Percentage charges can be used on charges in the order header and on the order lines.
    • Intercompany percent – The charge is entered as a percentage on the line for intercompany orders. Intercompany percentage charges can be used only on order lines.
    • External – The charge is calculated by a third-party service that is associated with one or more shipping carriers.

If you are validating charges for accounts payable, and if the charges are calculated as a fixed amount instead of a percentage, this value must be less than the maximum amount that is specified in the Charges code page.

In the Charges currency code field, specify a currency for the charge to use a different currency that is specified in the Currency field. This is possible if the Debit or Credit type is either Ledger account or Item for the selected charges code.

Specify a starting amount to apply the auto charge to in the From amount field. In the To amount field, specify the ending amount to apply the auto charge to. In this context, amount refers to the order total. To define tiered charges, you can specify a from amount and a to amount only if you define auto charges at the main level and if the category is Fixed or Percent.

Set up charge codes for accounts payable

1. Go to Accounts payable > Charges setup > Charges code.
2. Select New. In the Charges code field, type a code for the charge.
3. In the Description field, type a description of the charge.
4. Optional: In the Item sales tax group field, select a sales tax group.
5. Optional: In the Maximum amount field, type the maximum amount that is allowed for this charges code. This field is used to validate charges for vendor invoices. You can enable the validation of charges using the Accounts payable parameters page. In the Invoice validation area, enable the Enable invoice matching validation option.
6. On the Posting FastTab, specify how the charge is automatically debited and credited.
7. If you selected Ledger account as the debit type or credit type, specify a posting type in the Debit posting and Credit posting fields, and specify the main account in the Debit account and Credit account fields.
8. To enable the comparison of charges values for an invoice that contains the charges from the corresponding purchase order header or lines, enable the Compare purchase order and invoice values option. 

Create charges groups for vendors

1. Go to Accounts payable > Charges setup > Vendor charges group.
2. In the Charges group field, enter a code for the charges group. The code can contain both letters and numbers.
3. In the Description field, enter a description of the charges group.
4. Close the page to save your changes.

Create item charges groups

1. Go to Accounts payable > Charges setup > Item charge groups.
2. Select New to create an item charges group.
3. In the Charges group field, enter a code for the group. The code can be alphanumeric.
4. In the Description field, enter a description for the group.
5. Close the page to save your changes.