Whose Freight Is It
A purchase order in our system records what you ordered, when it is due, who acknowledged it and where the truck is. It does not record the one term that decides whether the freight on it was ever yours to pay — and we will attach that freight to your stock cost without asking.
The verdict
This is not a dramatic gap and we are not going to dress it up as one. Most orders, most of the time, are placed on terms both parties genuinely understand, and the freight ends up on the right books. But the cost of the gap is not the rare disaster — it is the steady, unnoticeable drift in unit costs from charges that were never yours, on a document detailed enough to record the tracking number and not the terms. If you buy domestically at volume in a market where the same three letters carry two meanings, ask every vendor on your list to show you the field. We will show you that we do not have one.
There is a line in most purchase contracts that decides more than anything else on the page: the point at which the goods stop being the seller's and start being yours. It settles who pays the carrier. It settles who takes the loss if the shipment is destroyed in transit. And it settles, quietly, which costs belong in the value of your inventory and which belong in somebody else's.
It is usually three or four characters long, and it is the single most consequential thing on a purchase order that our purchase order does not have a field for.
Why this is a North American post and not a general one
Because the vocabulary is genuinely ambiguous here in a way it is not elsewhere, and the ambiguity is old and well known and still catches people.
In international shipping, that familiar three-letter term is a precisely defined shipping arrangement with a narrow meaning — it belongs to sea freight and it names a specific moment at the port of loading. In everyday North American domestic purchasing, the same three letters are used far more loosely, followed by a place name, to mean roughly "ownership changes here" for a truckload of goods that will never see a ship. Both usages are entirely legitimate in their own context. They are not the same term, and a purchase order sent from a company that uses one to a supplier who reads it as the other has an ambiguity in it that nobody notices until something goes wrong.
Two parties can agree in writing, in the same three letters, to two different allocations of the same risk. The document that would catch it is the purchase order, and ours has no field for it.
A business buying domestically within one country, from suppliers it has used for years, on terms everybody assumes they understand, is exactly the business this costs money — because there is no customs broker in the middle asking the question, and no international paperwork forcing an answer.
What our purchase order does and does not carry
It is worth being specific, because the order is not a thin document. It carries the vendor, the lines, the quantities and prices, the department and the project it is for, the delivery date and the promised lead time, the warehouse and the exact location the goods are destined for, the moment the vendor acknowledged it, a shipping status, a tracking number, and a link to the vendor's invoice document. It knows a great deal about where the goods are.
It knows nothing about whose they are while they are there. The receipt does not close the gap either: a goods received note records what arrived and in what condition, which is a question about the goods rather than about who owned them on the way.
| On the order | Recorded | What it cannot tell you |
|---|---|---|
| Where the goods are going | Warehouse and specific location | — |
| When they are due | Delivery date and promised lead time | — |
| That the vendor accepted | Acknowledgement timestamp | — |
| Where the goods are now | Shipping status and tracking number | Who bears the loss if they never arrive |
| Delivery terms | Not recorded | The point at which title and risk pass |
| Who owes the carrier | Not recorded | Whether a freight charge on this order is legitimately yours |
The part where it reaches your stock value
We let you attach freight, duty, insurance and handling to a purchase order, and we spread those costs across the goods when they arrive so that your unit cost is what the goods cost to get to you rather than what the supplier charged for them — the mechanics of that are set out in what landed cost is. That is the right thing to do and it is one of the better-built parts of the product.
But we will accept any amount you type, against any order, with no view about whether it was yours to pay. If your terms put the freight on the seller and somebody attaches the carrier's invoice to the order anyway — because it arrived, and because attaching costs to orders is what the screen is for — your stock is now carrying a cost that belongs to your supplier. Nothing in the system objects, because nothing in the system knows.
The error is small per shipment and entirely invisible, which is the combination that lets it run for years. It does not produce a variance. It produces a slightly wrong unit cost, which produces a slightly wrong margin, which is indistinguishable from a supplier being slightly more expensive than you thought.
The related finding, in one sentence
There is a second constraint on those costs worth knowing about: the list of cost types you can attach is a fixed set of five and you cannot add to it. That is argued properly in Five Names for Every Cost and is not re-derived here.
Costs attached to an order and spread across the goods at receipt
Freight, duty, insurance and handling become part of the unit cost of what arrived rather than a separate expense, which is what makes a margin figure honest.
Where the goods are going, and when
Destination warehouse and location, delivery date, promised lead time, vendor acknowledgement, shipping status and tracking number.
A delivery-terms field on the purchase order
Not built. There is nowhere to record the point at which title and risk pass, in any notation, for any shipment.
Any check that an attached cost was contractually yours
Not built, and could not be — the term it would check against is not recorded. Any amount can be attached to any order.
A default terms setting per supplier
Not built. Suppliers carry contact, banking, prequalification and blacklisting detail, but no standing commercial terms.
Four questions worth asking about a purchasing system
Show me where delivery terms are recorded on a purchase order.
What a straight answer sounds like
A field, on screen, on a real order. Ours does not have one.
Why it matters
If it is not on the order it is in somebody's email, and it will be found the week you need it most.
Can the system stop me capitalising a freight cost that was the seller's?
What a straight answer sounds like
Almost certainly no. Get it said.
Why it matters
A wrongly capitalised cost does not show up as an error. It shows up as a supplier who seems slightly expensive.
Do suppliers carry standing commercial terms, or is it per order?
What a straight answer sounds like
One or the other, demonstrated.
Why it matters
Per-order-only means the answer is retyped every time, which means it is sometimes wrong.
If a shipment is lost in transit, what does the system say about whose loss it is?
What a straight answer sounds like
Nothing. It should say nothing. But make the vendor say so.
Why it matters
A vendor who claims their system resolves this is overselling, and you have learned something about how they answer questions.
Two, and the first is genuinely small
This is one of the cheaper gaps in this product to close, which is worth saying plainly rather than making it sound like a project.
Delivery terms on the order, and a default on the supplier
A terms field on the purchase order carrying both the notation and the named place, defaulting from the supplier record and overridable per order. Free text would do more good than nothing, and a short controlled list would do better. This is a field, a default and a form change.
A warning when an attached cost contradicts the terms
Once the terms are recorded, attaching a freight charge to an order whose terms put freight on the seller can raise a warning rather than a refusal — because there are legitimate reasons to do it, and a control that blocks a real case gets switched off. A warning that names the term is enough to make somebody look.
We would not build an interpreter for delivery terms and would push back on being asked to. The value is in recording the answer next to the goods it governs, so that the question gets asked at the moment somebody is in a position to answer it.
Talk to us about purchase order termsWhat AWRA OpsHub does today
- Landed costs attached at the order and spread at receipt, so unit cost reflects arrival rather than invoice price.
- A well-populated order — destination down to the storage location, project and department, acknowledgement, shipping status, tracking number and the vendor's invoice document.
- Receiving that counts what arrived, so a partial or short delivery is recorded as itself and the order stays open for the balance.
- Supplier prequalification and blacklisting, with reason, date and the person who did it.
What it does not do
- No delivery terms on a purchase order. No field, in any notation, on any order.
- No record of where title or risk passes, so the system cannot tell an in-transit loss that is yours from one that is your supplier's.
- No validation of attached costs against terms, because there are no terms to validate against.
- No standing terms per supplier, so nothing carries the answer forward from the last order to the next one.
- No freight-terms field on the goods receipt either, so the gap is not closed later in the process.
Not ours, by choice
- We will not interpret your delivery terms or tell you who owes a carrier. That is a contract question between you and your supplier, the answer has money attached, and it is not a software vendor's to give.
- We do not claim that recording terms would make your costing correct. It would make it checkable, which is a smaller and more honest claim.
Send us a purchase order you actually use
With the terms on it as your suppliers write them. We will tell you what we can record today, what we cannot, and which of the two builds above would matter for the way you buy.
Talk to us about purchasing