A shipper's claim for goods damaged in transit
How a transporter records a damage claim: a credit note on the freight invoice, a short payment, a payout above the invoice and the insurer's share.
By Achekam · · 4 min read · For Logistics businesses in South Africa, Nigeria, Kenya
The pallet of tiles arrived with a third of the boxes cracked. The receiving clerk noted it on the delivery note, the shipper's buyer refused part of the load, and a week later the shipper's accounts department writes: they will not pay your freight invoice until the damage is settled, and the damage is worth more than the freight.
Damage claims are a normal cost of moving goods, but the way they are recorded often makes them look worse than they are, or hides them altogether. Freight income is reduced when it should not be, a claim payment is booked against the wrong customer, or an insurance recovery never reaches the books. This article sets out how a transporter in South Africa, Nigeria or Kenya can record each kind of settlement in Achekam, once liability is agreed.
Agreeing liability first
Nothing should be recorded as settled until liability is agreed. Before accepting a claim, gather:
- the signed proof of delivery, with any exceptions the receiver noted;
- photographs taken at delivery, by the driver or the receiver;
- the collection documents showing the goods' condition when loaded;
- your trading terms on liability and any limits they set;
- the shipper's claim, with the value of the damaged goods and how it was worked out.
The proof of delivery is usually the deciding document. DP World's explainer on the proof of delivery describes what a POD records, including the recipient, the time and the condition of the goods, and why it matters for billing and disputes. Keep all of it together; Document Centre lets you upload, tag and search files, and a new version keeps the earlier ones, so a revised claim does not overwrite the first. Filing PODs consistently is covered in proof of delivery files.
Agreement may be full liability, partial liability, or none. Each leads to a different entry.
A credit note against the freight invoice
Where the agreed settlement is to reduce or cancel the freight charge, issue a credit note. A credit note is issued from the invoice it corrects, in full or for chosen lines, posted to the ledger, and can be downloaded as a PDF or e-mailed, with leftover credit held for the customer. There is no credit note without an invoice behind it.
A credit note uses its original invoice's date and tax codes, so VAT is reversed on the same basis it was charged. That suits a settlement that genuinely reduces the price of the transport service.
Be careful about using a credit note for compensation. A credit note says "we charged you too much for the service". A damage settlement often says "we owe you for goods we damaged", which is a different thing and may be treated differently for VAT and in your accounts. Agree with your accountant which settlements are price reductions and which are compensation.
A short payment left part-paid
Often the shipper simply pays less, deducting the claim from the freight invoice. Payments are recorded against one invoice or spread across a customer's invoices, and a part payment leaves the invoice part-paid.
Record exactly what was received. Do not mark the invoice paid because the shipper says the rest is "set off". The outstanding balance then shows in the shipper's account until the claim is settled, either:
- by a credit note for the agreed amount, if liability is accepted; or
- by collecting the balance, if the claim is rejected; or
- by a write-off, if the balance is small and not worth disputing; an unpaid debt can be written off once a partner approves.
Short-paid invoices sitting in the ageing are how claims are kept visible; shipper accounts and ageing shows how to read them.
Paying a claim that exceeds the invoice
When the damage is worth more than the freight, a credit note cannot cover it, because a credit note cannot exceed the invoice it corrects. The excess is a payment to the shipper.
Two clean ways to record it:
| Route | How it works |
|---|---|
| A manual journal and the bank | Post a journal debiting a "Claims for goods in transit" expense and crediting a "Claims payable" liability; when the payment leaves the bank, approve the bank line against Claims payable |
| A supplier bill | Set the shipper up as a supplier too, and record the claim as a bill posted to the claims expense; it can then be paid in full or in parts from a chosen bank account |
A business can post manual journals; an unbalanced one, or one dated in a closed month, is refused, and a posted journal is corrected only by a reversal. In the bank reconciliation, a line not yet in the books becomes a suggested journal a person approves, so the payment is matched to the liability rather than posted to an expense a second time.
Recovering from your insurer
Most transporters carry goods-in-transit cover. When the insurer pays, record the recovery in its own account, such as "Insurance recoveries: goods in transit", so the management accounts show both the gross cost of claims and what was recovered. The difference is the cost you actually bore, including the excess.
Timing matters. The recovery should be recorded when the insurer agrees it, or when the money arrives, as your accountant prefers, but never netted silently against the claims expense. Approve the insurer's payment in the bank reconciliation against the recoveries account.
A claims routine
- Log each claim on the day it arrives, with the shipper, load and amount claimed.
- Assemble the proof of delivery and photographs before responding.
- Agree liability in writing.
- Record the settlement using the route that matches what was agreed.
- Lodge your own insurance claim promptly and record the recovery separately.
- Review open claims and short-paid invoices each month.
Claims rarely improve with age. Settling each one cleanly and on record keeps the shipper relationship intact and the books honest.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
