Scribd
Upload
355 views13 pages

Consignment Process Guide

This document provides an overview of the consignment process. It explains that consigned goods remain the property of the vendor throughout the process. When receiving consigned goods, no value is recorded on the purchase order or goods receipt. When consuming the goods, a goods issue is created that generates a liability to the vendor. The accounts payable department then runs processes to settle the liability and generate an invoice for the vendor.

Uploaded by

jenfil82
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
355 views13 pages

Consignment Process Guide

This document provides an overview of the consignment process. It explains that consigned goods remain the property of the vendor throughout the process. When receiving consigned goods, no value is recorded on the purchase order or goods receipt. When consuming the goods, a goods issue is created that generates a liability to the vendor. The accounts payable department then runs processes to settle the liability and generate an invoice for the vendor.

Uploaded by

jenfil82
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 13

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:

You might also like