Consignment warehouse in SAP Business One

A consignment warehouse is a supplier's warehouse on the premises or in the vicinity of a customer. In this warehouse, goods and/or parts are kept for the customer, which are to be delivered to the customer in the future. SAP Business One is prepared accordingly for this type of goods delivery.

Property in the consignment warehouse

The supplier (consignor) remains the owner of the goods even if they are on the customer's (consignor's) premises. The transfer of ownership from the supplier to the customer takes place after the expiry of a period or the customer takes goods from the consignment warehouse. By means of a contractual retention of title, the supplier can also remain the owner of the goods until they have been paid for in full.

Consignment stock in financial accounting

In accounting terms, this means that moving stock to the consignment warehouse is the same as moving stock from one warehouse to another.

In SAP Business One, a Stock transfer is required. In the "Warehouse definition" object, you can define a specific business partner as the consignor by making an entry in the corresponding field.

Sales documents in SAP Business One

Based on the consignor's report, one can then issue the sales documents from within SAP Business One: Deliveries and outgoing invoices to the customer or to the customers referred by the consignee, depending on the consignment model.
So when items are taken from the customer's consignment stock, as a supplier you create an A/R invoice in SAP Business One for the items and quantities used. Each row refers to the consignment warehouse so that the stock is shown as withdrawn from the warehouse when the invoice is saved.

The difference between commission and consignment stock?

The consignment warehouse is also a type of warehousing for customers. In contrast to the consignment warehouse, the goods remain the property of the supplier until they are sold to the end customer.

What is a consignment warehouse?

A consignment warehouse is a warehouse operated by a supplier on the premises or in the vicinity of a customer. In this warehouse, goods or/and parts are kept for the customer, which are to be delivered to the customer in the future. The supplier remains the owner of the goods, even if they are located on the customer's premises. The transfer of ownership from the supplier to the customer takes place after the expiry of a period or the customer takes goods from the consignment warehouse.

What about ownership in the consignment warehouse?

The supplier (consignor) remains the owner of the goods even if they are located on the premises of the customer (consignor). Through a contractual retention of title, the supplier can also remain the owner of the goods until they have been paid for in full.

How is a consignment warehouse treated in financial accounting?

In accounting terms, this means that transferring stock to the consignment warehouse is the same as transferring stock from one warehouse to another. In SAP Business One, a stock transfer is required. In the "Warehouse definition" object, you can define a specific business partner as the consignor by making an entry in the corresponding field. The sales documents can then be issued in SAP Business One based on the consignor's report.

How are sales documents issued in SAP Business One?

Based on the consignor's report, one can then issue the sales documents from within SAP Business One: Deliveries and A/R invoices, depending on the consignment model, to the customer or to the customers that the consignee subcontracts. Thus, when items are taken from the consignment warehouse at the customer's premises, the supplier creates an outgoing invoice in SAP Business One for the items and quantities used.

What is the difference between commission and consignment stock?

The consignment warehouse is also a type of warehousing for customers. In contrast to the consignment warehouse, the goods remain the property of the supplier until they are sold to the end customer.

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