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Consignment process

Concept explanation

JP Body 2/18/2016

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1. Overall Explanation

2. Receiving Consigned Goods

3. Consuming Consigned Goods

4. Invoicing

Agenda

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Overall explanation

What is consignment?

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  • When receiving Consigned goods from a Vendor

Consignment Fill-Up

Vendor View

Goods Issue

Property

of

Vendor

Create Sales Order

Consignment Fill-Up

TCNA View

Goods Receipt

Property

of

Vendor

Create Purchase Order

  • The Goods remain property of the vendor throughout the whole flow

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1. Overall Explanation

2. Receiving Consigned Goods

3. Consuming Consigned Goods

4. Invoicing

Agenda

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Receiving consigned goods

Closer look at the Purchase order

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  • As we can see, there will be no value on the PO:

  • The goods do not belong to us so there will be no value accounted for during receipt
  • In accounting nothing happens !

  • Same on the receipt:

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Receiving consigned goods

Closer look at Inventory

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  • Handling inventory of consigned goods happens like any other goods:

  • Everything arrives at the warehouse and quantities can be followed up as usual
  • However, no value will be available !

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  • To see the value of Consigned items according to the Purchase Info Record, use MB54

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1. Overall Explanation

2. Receiving Consigned Goods

3. Consuming Consigned Goods

4. Invoicing

Agenda

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Consuming the goods

Goods issue for Consignment items

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  • Consigned goods, once available in our Warehouse can be used:

  • Consuming a consigned good will be similar as purchasing it, as we make it ours at that moment.

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  • At Goods Issue, we will create a liability towards the Vendor !

414*

162020

Goods Issue

6,960.53

6,960.53

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1. Overall Explanation

2. Receiving Consigned Goods

3. Consuming Consigned Goods

4. Invoicing

Agenda

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Creating a liability

When consuming consigned goods, what does it do for the Vendor

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  • Once we have used a consigned good, we will need to pay for it

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  • We will not pay for consigned goods before consumption

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  • Issuing a consigned item creates a liability towards the Vendor, not before

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  • We will tell the Vendor we used a consigned item

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  • The Vendor Invoice will come from our side
    • This means Purchase Info Records need to be up to date
    • The date of the Goods Issue will determine the price used, so be smart when consuming consigned goods before or after a contract changes

​

  • Invoices are generated by AP for the moment

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Debiting Liability

Weekly process used by AP to generate the invoice

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  • Once a Goods Issue has happened, AP launches MRKO:

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162020

161000

Settlement

6,960.53

6,960.53

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Generate the Invoice

Weekly process used by AP to generate the invoice

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  • After Settlement (MRKO), invoices are generated using the Message generation:

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