During preparation of a sales invoice, I added the freight as “actual” to the section “Taxes and Charges”. The account head chosen was “Freight and forwarding Costs”.
I noticed that this account was credited by the amount of the freight on submission of the sales invoice.
After receiving the total amount (product + freight) from my customer to my bank account, I entered this amount via the “make a payment” button, thus finalizing the payment.
The problem is that now the amount shown in bank account’s account head is higher than the amount in my actual bank account - by the amount of the freight costs. Meaning that somehow the freight is not accounted for.
Do you have an idea what the reason for this problem is and how I could avoid it in the future?
Check the acconting ledger of your bank. It seems there might be multiple entries somewhere.
The bank ledger looks fine.
The problem seems to be with the “Freight & Forwarding Charges” (FFC) account listed as a liability under “Duties and Taxes”.
The invoice in question for customer A was for a total of USD 1200, including USD 300 for freight.
On submission of the invoice the following account entries where made automatically:
- Accounts Receivable, customer A: Debit USD 1200, credit sales
- Freight & Forwarding: Credit USD 300, debit account receivable, customer A
- Stock Received but not billed: Debit USD purchase cost of item, credit supplier
There has never been an entry in “Stock received but not billed” and I don’t know where this comes from.
After making the payment, the following account entry was made automatically:
- Accounts Receivable, customer A: Credit USD 1200, debit bank account
No entry to the FFC account was made, though.
I am a bit at a loss here, but I am sensing I messed up somewhere and now have a hard time finding the source of the problem.
But maybe you still have an idea of what might have gone wrong.
I guess I have found the problem:
In this case I transferred the freight amount to our forwarder, so our actual bank account was reduced by that amount. However, the same did not happen in ERPNext.
EDIT: I think I expected the system to automatically debit the Freight & Forwarding Costs liability account (and crediting the bank account) after having entered the final payment for the invoice with the attached freight costs.
It it possible to have ERPNext to automatically make this entry?
@bytesource I am at a bit of loss regarding this.
Once you receive the payment, you still have to pay the forwarder (right?),
Maybe Freight & Forwarding Cost should be an “Income” for you and when your forwarder bills you, you will make the payment?
@nabinhait, can you have a look?
I think the problem arose because I confused the liability account “Freight & Forwarding” with an expense account. So ERPNext had been working properly all the time. Sorry, for the false alarm.