We're optimizing calculation of sales and use tax by recording invoices to separate tax, freight, etc. Are delivery fees and shipping/handling charges the same as freight costs?


Delivery fees or “shipping and handling” are essentially the same thing as freight— it’s the cost to get the product to you, above the actual product cost.  You probably want to separate costs into your product cost, tax, and the shipping/freight charges. A lot of companies do as you are proposing to do.

You do want to include them in your “total supplier cost” if you are analyzing spend, and not ignore them. Some suppliers may have a lower product cost but are making up the difference with extra cost under “handling” or added percentage to their actual delivery or freight cost.  There might be price negotiation opportunities in these costs as well.

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