There are two ways of recording Freight/Shipping Charges in Dynamics 365 Business Central:
- Using an Item of Type Non-Inventory and calling it Freight: You essentially create an Item of Type “Non-Inventory” or “Service” and add that to your Sales and Purchase Orders. When you do this, it is up to the accountant to account for this Freight cost as part of the cost of the Item that is being shipped. In other words, the profitability of each item can only be analysed based on all the items combined and not item by item.
- Using Item Charges (Charge (Item) ); You go to “Item Charges” and create an Item Charge Called “Freight”; you then add this to the Sales and Purchase Orders and click on the line to Assign the charges to the relevant items on the order. This method will mean the system will automatically assign the Freight amount (Item Charge) to the Sales/Purchase lines you pick and you can analyse the Item profitability Item by Item (there are check boxes to say show including or excluding Item Charges); this is more helpful than using the straight method of Freight as an Item. Item charges are strictly financial and do not affect inventory quantities.
Both options are available to you in Business Central and depending on the use-case some might prefer one method or the other. In general, it is probably more efficient over the long run to use Item Charges over Freight as an Item.
If you are taking the path of Item Charges, Microsoft’s documentation offers some explanation on how to Setup Item Charges and how to Assign Item Charges to Sales and Purchase Invoices. This includes the ability to Assign Item Charges in Dynamics 365 Business Central on Open Purchase and Sales Orders as well as Closed Purchase and Sales Orders.