Understanding Storage Charge Methods
🔔 Note: this article is part of the CartonCloud Academy - WMS Charging Trail. Please ensure you have read Introduction to Storage Charges and Storage Periods first. 🎓
Per location and per location (and bulk location pallets)
The first storage charge method we are going to cover is per location and per location (and bulk location pallets).
Follow along with Brittany as she explains how these two storage charges work.
These two storage charge methods are quite similar, however, they have a few key differences. Each storage charge method is summarised below:
| Storage charge method | Description |
|---|---|
| Per Location (default) | Storage charges are calculated based on the number of Warehouse Locations that are used. In the case where multiple products are stored on a single pallet, the system will just charge the location once. Bulk locations may be used to store multiple 'pallets' in a single location and therefore charge multiple pallets of storage.
Per-Location charges do not take into account the quantity of product in a location, simply the number of unique locations used. |
| Per Location (and bulk location pallets) |
Calculated similarly to Per-location (default), however, the product quantity is taken into account when calculating storage charges. This means large quantities of stock can be loaded into locations without being split into individual pallets. Notes:
Single Pallet Locations: If you are using this charging method for single pallet locations, CartonCloud will default by the number of pallets in the location (even if this exceeds one). However, if you wish only to allow one charge for each location, you can change this from the Organisation Settings. The option is called: "If "Per Location (and bulk location pallets)" Storage Charges are used - Should all stock on Single Pallet Locations be combined into a single charge?"
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Nick from Coffee Warehousing and Distribution is evaluating if he will use this storage charge method. Most of his warehouse locations are racked so Per location would work for him. However, he doesn’t have any bulk locations so he probably wouldn’t use per location (and bulk location pallets). Nick is going to take a look at the other storage charge methods available before he makes his decision.
If you are going to use per location or per location (and bulk location pallets) storage charge method you need to ensure the below is set up before creating the charge:
- The products using this charge have the charge method selected against the product (in the product settings).
- The product type set against the charge matches the product type set against the product
Volume Based and Weight Based
The second storage charge method we are going to cover is volume based and weight based.
Follow along with Brittany as she explains how these two storage charges work.
| Storage charge method | Description | Set up requirement |
|---|---|---|
| Volume Based | It is calculated based on the total amount of product volume in the warehouse during the given time period.
The number of warehouse locations used does not impact the storage charges. |
To utilise Volume Based storage charge method, you will first need to configure the Product settings:
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| Weight Based | It is calculated based on the total amount of product weight in the warehouse during the given time period | To utilised Weight Based storage charge method, you will first need to configure the Product Settings:
|
Weight based storage charge method can be utilised when storing larger and heavier items. For example, steel or drums of liquid that are sold in litres rather than in bottles.
Volume based storage charge method is best utilised when wanting to accurately track the actual storage space being utilised. Nick from Coffee Warehousing and Distribution doesn’t think this suits the way he charges his customers or the types of product they store.
However, if utilising this storage method ensure you have set up the product weight and/or volume at the product settings, the products using this charge have the same charge method selected (in the product settings) and the product type set against the charge matches the product type set against the product.
Per Pallet (Based on Quantity)
Follow along with Brittany as she explains how per pallet storage charge works.
Per pallet (based on quantity) is a popular storage charge method as it is an effective way to accurately track the actual storage space being utilised. However, this storage charge method can only be applied for products that have pallet conversions. Therefore, if the product you are storing does not have pallet conversions, you would use a different storage charge method. With per pallet (based on quantity) storage charge method, it is important to note that the total quantity of each product is aggregated across all warehouse locations and then the number of pallets are calculated and rounded up to the nearest whole number.
Nick from Coffee Warehousing and Distribution would like to use this storage charge method for one of his customers as they have product pallet conversions set up for their products and use pallets to store their goods. Nick reads over the following set up requirements to make sure the products are set up correctly to use this storage charge method:
| Storage charge method | Description | Set up requirements |
|---|---|---|
| Per pallet (based on quantity) | The total quantity of each Product is aggregated across all warehouse locations, and then the number of pallets are calculated and rounded up to the nearest whole number. Finally, the unit of measure conversion for the pallet quantity is utilised to determine the number of pallets. For example, if 6 cartons = 1 pallet and you have 8 cartons of one product for a storage period, CartonCloud will round up and charge 2 pallets for that storage period. |
To utilise the Per Pallet (based on quantity) storage charge method, you must first set up the Product Unit of Measure for pallet for each applicable Product using the charging method and the pallet conversions. Click here for instructions on how to set up the Product Unit of Measure. The products using this charging method must have Per Pallet (based on quantity) selected as the storage charge method in the product settings. |
Now that Nick knows how Per Pallet (based on quantity) storage charge method works and has set up his products accordingly he is ready to start creating his storage charges. How to create storage charges will be covered in the upcoming units.
Per Unit of Measure
The next storage charge method we are going to cover is per unit of measure.
Follow along with Brittany as she explains how per unit of measure storage charge works.
Per unit of measure storage charge method calculates storage rates for products based on the Unit of Measure specified. This is similar to per item storage charging, however, you can have different charges for each different Unit of Measure. This method is helpful if you wish to charge storage to your customers by only one Unit of Measure (using the round up or down to Unit of Measure functionality) or if you would like to have different charges for each Unit of Measure.
Creating a Storage Charge
When you create a storage charge there are a few things you need to consider to ensure the charge is set up correctly and you avoid charge errors in the future.
You will need to select a storage charge method when you create your storage charge. If you still are unsure on what storage charge method you would like to utilise please go back to the previous units to revise.
Follow along with Brittany as she steps you through how to create a storage charge in your customer’s rate card.
Nick is now ready to start creating storage charges to ensure all storage costs are covered and he is charging and invoicing his customers correctly.
▶️ Follow along in the WMS Charging Trail...next up is Other Charges 🎓