GL Coding / General Ledger Allocation

GL coding is how freight costs get categorized in a company's accounting system. Every shipment's cost needs to land in the right bucket – by business unit, customer, product line, facility, or cost center – so that P&L statements, margin analyses, and budgets reflect where transportation dollars are actually going. Without accurate GL coding, freight becomes an opaque lump sum that finance teams can't decompose or act on.

In practice, GL coding means tagging each freight invoice or accrual entry with the appropriate account codes before it flows into the ERP. A single shipment might need to be split across multiple GL codes – for example, a consolidated load carrying product for three different customers, each needing their share of the freight cost allocated to their account. The more complex the shipper's business, the more granular and nuanced the coding rules become.

Getting GL coding wrong has cascading effects. If freight costs are coded to the wrong department or customer, margin calculations are off, cost-to-serve analyses are unreliable, and budget variances appear where none exist. For CPG shippers with thin margins, even small allocation errors can distort the profitability picture for an entire product line. Manual GL coding – someone looking up account numbers and typing them into an invoice – is slow and error-prone, especially at high shipment volumes.

Modern freight finance platforms can automate GL coding by applying rules based on shipment attributes – customer, origin, destination, product type – and pushing coded entries directly into the ERP. This eliminates manual data entry and ensures consistency across thousands of transactions.