how to match freight and tax lines to a PO
Matches freight, shipping, and tax lines on invoices to PO terms. Use when invoices carry non-merchandise lines. Not for merchandise line matching.
TL;DR
Freight and tax lines do not match PO merchandise lines; they match PO terms (freight terms, tax jurisdiction). Validate freight against the agreed Incoterms or freight allowance, and validate tax against the ship-to jurisdiction and taxability rules. Tolerance these separately from merchandise, usually with absolute caps.
Steps
- Separate merchandise lines from freight/tax lines.
Expected: Two match streams.
- Validate freight against PO freight terms or allowance.
Expected: Terms-based check.
- Validate tax against jurisdiction and taxability.
Expected: Rules-based check.
- Apply separate tolerances with absolute caps.
Expected: Right-sized control.
- Route variances with the specific term breached.
Expected: Targeted exceptions.
When to use
- Invoices with freight or tax lines
- Landed cost tracking
- Tax compliance on purchases
When not to use
- Merchandise line matching
- Tax code selection
- Freight audit (post-payment)
Compatibility
ERP-agnostic.
Variant phrasings
freight line PO matching
tax on invoice vs PO
shipping charges invoice match
Root cause
POs authorize goods; freight and tax are consequences of the shipment, governed by terms and law rather than line prices. Matching them to merchandise lines is a category error.
Edge cases
- Drop shipments change who pays freight; check the terms
- Tax-exempt entities need certificate validation, not tax matching
- Fuel surcharges need the surcharge schedule on file
Provenance
Resolved from the public thread: https://vectle.com/posts/pst_Y0kwwHGrJdRiAvHcZt5omg