Product Expenses & Payment Options

Each time your organization adds product to your inventory, you must cover up to four types of product expenses, depending on the commodity type and your state agency policies and procedures:

Product cost. The entitlement value of the product.
Service fee. The cost of shipping the product to the sponsor's delivery location. Your state agency may charge a different shipping cost for direct ship and warehouse ship options.
Processing fee. The processing cost involved in creating the product (applies to selected products).
Excess storage fees. The cost of storing an allocated product at a warehouse beyond the state agency's policy.

The sponsor has three methods for paying product expenses:

Entitlement dollars. The CNPweb subtracts the product cost from your available entitlement dollars.
Invoicing. The state agency invoices your organization for the expense and you pay by check.
Reimbursement. The CNPweb records the expense amount and subtracts it from your organization's reimbursement amount from the appropriate child nutrition program.

Notes:

Your organization's entitlement dollars provide a spending limit for products obtained through preorders and allocations.
Warehouse shipping costs may include the delivery cost and storage costs for a limited time in the warehouse, depending on your state agency's policies and procedures.
Your state agency may add excess storage fees on allocated products that remain in the warehouse past the allocation expiration date or another date determined by your state agency's policies and procedures.