[SOLVED] Shipping Cost Calculation

We follow Cash on delivery system for our online shop. i am having issue on how to handle Shipping kindly share your thoughts on how to manage it properly. ok here is the scenario
A shoe item worth 8$ has been sold to customer 2$ standard shipping cost apply. the total amount in the invoice $10.
$ 8 goes to sales and then cash or bank … shipping cost goes to freight charges account … everything fine here
now upon sales returns in some cases … the we (seller) have to pay for shipping charges as product was not sold and return back … how to handle the proper sales return so that shipping cost charges paid from seller … stock is restored poperlay …
kindly if some body can explain step by step would be nice to understand the whole process … thanks

@umair @ArundhatiS can you help?


Thanks for elaborating your query. Following is how would I suggest to manage this scenario in ERPNext.

  1. Create an Account for Shipping Cost (Charged to Customer). Perhaps you can add this account under Income,
  2. Create an Account for Shipping Expense (for you). Add this account on the expense side.
  3. In the Sales Invoice/Delivery Note, select Shipping Cost (income) account. With this, on submission of Sales Invoice, shipping cost charged to the customer will be booked on the income side.
  4. In the Sales Return/Credit Note entry, replace Shipping Cost account with Shipping Expense account, and set positive amount.

I suggest trying a sales cycle as per above configuration. Looking forward to your feedback.


Umair thanks for suggesting the solution to the current scenario … your answer explains alot of things … and i run the sale cycle and everything is proper place and i will adopt your method . before your answer i was thinking about to put the courier service as service supplier, also for this delivery price must be included in total price of the product. this way all the payment to the courier will be made by our company also upon successful sales everything goes to income account. and the report will display actual profit and loss …
Thanks to erpnext team for such a wonderful and helpful community.