Freight Accruals

Freight accruals are the accounting entries a shipper books to recognize freight costs as they're incurred – not when the carrier invoice arrives, which can be days or weeks later. They bridge the gap between when a shipment moves and when the bill shows up, keeping financial reporting accurate and period-appropriate.

In practice, accruals are typically estimated based on tendered rates at the time of shipment. If a load was tendered to a carrier at $2,400, that amount gets accrued as a transportation expense immediately – even though the carrier might not invoice for another 10 to 30 days. When the actual invoice arrives, the accrual is reversed and replaced with the real cost. Any difference between the accrued estimate and the actual invoice becomes a variance that finance teams track.

Getting accruals wrong – or not doing them at all – creates painful downstream problems. Without accruals, freight costs hit the books in lumpy, unpredictable waves that don't align with the periods when shipments actually moved. This distorts margin calculations, makes budgeting unreliable, and gives supply chain executives an inaccurate picture of true landed cost. For shippers in food and beverage or CPG – where freight is a significant percentage of COGS – accrual accuracy directly affects financial planning.

The key to clean accruals is real-time visibility into shipment-level costs as loads are tendered and move through the network. When accrual estimates are generated automatically from tendered rate data and updated as invoices are received, the variance shrinks and month-end close gets significantly less painful.