Consignment processConcept explanation

JP Body 2/18/2016

1. Overall Explanation

2. Receiving Consigned Goods

3. Consuming Consigned Goods

4. Invoicing

Agenda

Overall explanationWhat is consignment?

1

• 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

1. Overall Explanation

2. Receiving Consigned Goods

3. Consuming Consigned Goods

4. Invoicing

Agenda

Receiving consigned goodsCloser look at the Purchase order

2

• 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:

Receiving consigned goodsCloser look at Inventory

2

• 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 !

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

1. Overall Explanation

2. Receiving Consigned Goods

3. Consuming Consigned Goods

4. Invoicing

Agenda

Consuming the goodsGoods issue for Consignment items

3

• 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.

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

414* 162020

Goods Issue6,960.53 6,960.53

1. Overall Explanation

2. Receiving Consigned Goods

3. Consuming Consigned Goods

4. Invoicing

Agenda

Creating a liabilityWhen consuming consigned goods, what does it do for the Vendor

4

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

• We will not pay for consigned goods before consumption

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

• We will tell the Vendor we used a consigned item

• 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

Debiting LiabilityWeekly process used by AP to generate the invoice

4

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

162020 161000

Settlement6,960.53 6,960.53

Generate the InvoiceWeekly process used by AP to generate the invoice

4

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