Consignment process

Concept explanation

JP Body

2/18/2016

Agenda
1. Overall Explanation
2. Receiving Consigned Goods
3. Consuming Consigned Goods
4. Invoicing

explanation
1 Overall
What is consignment?
When receiving Consigned goods from a Vendor
Vendor View
Consignment
Fill-Up
Goods Issue
Create
Sales
Order

Propert
y
of
Vendor

TCNA View
Consignment
Fill-Up
Goods Receipt
Create
Purchase
Order

Propert
y
of
Vendor

The Goods remain property of the vendor throughout the whole

flow

Agenda
1. Overall Explanation
2. Receiving Consigned Goods
3. Consuming Consigned Goods
4. Invoicing

consigned goods
2 Receiving
Closer look at the Purchase order
As we can see, there will be no value on the PO:

Same on the receipt:

The goods do not belong to us so there will be no value

accounted for during receipt
In accounting nothing happens !

consigned goods
2 Receiving
Closer look at Inventory
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 M

Agenda
1. Overall Explanation
2. Receiving Consigned Goods
3. Consuming Consigned Goods
4. Invoicing

the goods
3 Consuming
Goods issue for Consignment items
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*
6,960.53

162020
6,960.53

Goods Issue

Agenda
1. Overall Explanation
2. Receiving Consigned Goods
3. Consuming Consigned Goods
4. Invoicing

a liability
4 Creating
When consuming consigned goods, what does it do for the Vendor
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

Liability
4 Debiting
Weekly process used by AP to generate the invoice
Once a Goods Issue has happened, AP launches MRKO:

162020
6,960.53

161000
6,960.53

Settlement

the Invoice
4 Generate
Weekly process used by AP to generate the invoice
After Settlement (MRKO), invoices are generated using the Message
generation: