Shipping cost calculations

  • Release version: Xanadu
  • Updated August 1, 2024
  • 2 minutes to read
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    Summary of Shipping cost calculations

    This framework enables the integration of shipping cost calculations into ServiceNow's Sourcing and Purchasing Automation processes. It allows organizations to include shipping cost estimates in purchase requests and approvals, ensuring that purchase values reflect the total expected cost, including shipping. Both Shopping Hub administrators and buyers can provide shipping cost estimates, supporting more accurate budgeting and compliance with organizational policies.

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    Key Features

    • Shopping Hub Administrator Shipping Estimates: Administrators can set a default system-wide shipping estimate as a percentage, applied when no other shipping data exists. This default estimate can represent an acceptable threshold cost policy and is controlled via the snshop.default.shipping.estimate system property.
    • Inclusion in Purchase Approvals: Administrators can configure whether shipping estimates are included in purchase request approvals using the snshop.shipping.estimate.inclusion property. If set to true, shipping costs from cart lines or checkout are included in purchase line totals and approval amounts. If false, shipping costs are excluded from purchase request approvals and checkout calculations.
    • Buyer-Level Shipping Estimates: Buyers can specify shipping estimates at two granular levels:
      • Supplier Level: A default shipping estimate percentage for all products from a specific supplier, set in the supplier record’s Purchasing Automation tab.
      • Product Level: A prioritized shipping estimate percentage for individual supplier products, configured in the supplier product record’s Purchasing Automation tab, which overrides supplier-level and system-wide defaults.
    • Shipping Cost Calculation Logic: For goods in the cart, shipping cost estimates are calculated using a prioritization that considers product-level, supplier-level, and system-wide estimates. For services, the shipping cost estimate is always zero.

    Key Outcomes

    • Organizations can enforce policies on acceptable shipping cost thresholds by setting default estimates.
    • Purchase approvals reflect total estimated costs, improving financial accuracy and decision-making.
    • Buyers have flexibility to input more precise shipping estimates at the supplier or product level, enhancing estimate accuracy.
    • Shipping costs are consistently calculated and displayed in the cart, streamlining the purchasing experience and reducing surprises at approval or order stages.
    • Shipping estimates are excluded from purchase order totals, maintaining clarity in post-approval order values.

    A framework to integrate shipping cost calculations into Sourcing and Purchasing Automation is implemented such that approvals can be done on the full value of purchases.

    Shipping estimates can be provided by both the Shopping Hub administrator and the buyer.

    Shipping estimates from Shopping Hub administrator

    A Shopping Hub administrator can set a default system-wide shipping estimate as a percentage. This can then be applied to all purchases that require shipping, when no other shipping estimates or data exist. This is enabled through a system property sn_shop.default.shipping.estimate. Organizations that have a policy around an acceptable threshold shipping cost might want to enter the threshold in the sn_shop.default.shipping.estimate.

    A Shopping Hub administrator can also configure shipping estimates to be included in purchase requests for the approval process. This is enabled through a system property sn_shop.shipping.estimate.inclusion, which is included in purchase request approvals. If this inclusion is marked as true, the shipping estimate from the cart line or checkout is included as a field in the purchase line and in the total amount in the purchase request, while the estimate in cost allocation is not considered. However, if this inclusion is marked as false, not only would shipping be excluded in the purchase request approval process, but also not calculated at checkout, even if data is included at the product, supplier, or system levels.

    Note:
    When a purchase request becomes a purchase order, the shipping estimate is not included in the total amount.

    Shipping estimates from buyer

    A buyer can set shipping estimates at the following levels:
    • Supplier:

      Set a standard percentage estimate for shipping costs from a specific supplier. This estimate is then applied to all the orders that require shipping from that supplier, which do not have any estimate at the product level. In the Purchasing Automation tab of the supplier record, enter a shipping estimate value in decimal in the Default shipping estimate for products from this supplier (calculated as percentage of negotiated unit price) field.

    • Product:

      Set a default shipping estimate for a supplier product record. This is then prioritized in estimating the shipping cost of a purchase over any supplier level estimate or default shipping estimate. In the Purchasing Automation tab of the supplier product record, enter a shipping estimate value in decimal in the Default shipping estimate for this supplier product (calculated as percentage of negotiated unit price) field.

    Note:
    The entered decimal values are stored in percentage. For example, a shipping estimate value of 10.5 is stored as 10.5%.