It’s a smart warehouse form where a supplier stores goods or spare parts close to the customer’s premises, to be delivered to the customer in the future. And now SAP Business One version 10 can also handle this type of goods delivery!
The supplier remains the owner of the goods, even though they are on the customer’s premises, and can create an invoice in SAP Business One for the used goods and quantities when the customer takes goods from the consignment warehouse. You can easily create a consignment warehouse in SAP Business One by defining a specific business partner as the consignor in the Warehouse Definition.
All about consignment warehouse
The difference between a commission warehouse and a consignment warehouse is that in a consignment warehouse, the goods remain the property of the supplier until they are sold to the end customer, while in a commission warehouse, the goods have already been sold to the end customer but are temporarily stored with a dealer or broker.
What is a consignment warehouse?
A consignment warehouse is a warehouse operated by a supplier on the customer’s premises or close to the customer. In this warehouse, goods or spare parts for the customer are stored, to be delivered to the customer in the future. The supplier remains the owner of the goods, even though they are on the customer’s premises. The transfer of ownership from supplier to customer takes place after a period or when the customer takes goods from the consignment warehouse.
How is a consignment warehouse treated in financial accounting?
Accounting-wise, moving inventories to the consignment warehouse is the same as moving inventories from one warehouse to another. In SAP Business One, this requires a warehouse transfer. In the “Warehouse Definition” object, one can define a specific business partner as the consignor by making an entry in the corresponding field. Based on the consignor’s report, sales documents can then be issued in SAP Business One.
What is the difference between commission warehouse and consignment warehouse?
The consignment warehouse is also a storage form for customers and unlike the consignment warehouse, the goods remain the property of the supplier until they are sold to the end customer.
What about ownership in the consignment warehouse?
The supplier (consignor) remains the owner of the goods, even though they are on the customer’s (consignee’s) premises. Through a contractual reservation of ownership, the supplier can also remain the owner of the goods until they are fully paid.
How are sales documents issued in SAP Business One?
Based on the consignee’s report, sales documents can be issued from SAP Business One: Deliveries and A/R invoices, depending on the consignment model, to the customer or to the customers the consignor subcontracts to. So when goods are taken from the customer’s consignment warehouse, the supplier creates an outgoing invoice in SAP Business One for the used goods and quantities.
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