Consignment warehouse in SAP Business One

A consignment warehouse is a supplier's warehouse on the company premises or in the vicinity of a customer. Goods and/or parts that are to be delivered to the customer in the future are stored in this warehouse. SAP Business One is prepared for this type of goods delivery.

Property in the consignment warehouse

The supplier (consignor) remains the owner of the goods even if they are located on the customer's (consignor's) premises. The transfer of ownership from the supplier to the customer takes place after a period of time has elapsed, or the customer removes goods from the consignment warehouse. Through 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 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.

Sales documents in SAP Business One

Based on the consignor's report, the sales documents can then be issued in 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So when items are withdrawn from the customer's consignment warehouse, the supplier creates an outgoing invoice in SAP Business One for the items and quantities used. Each line refers to the consignment warehouse so that the stock is displayed as withdrawn from the warehouse when the invoice is saved.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 consignment warehouses, 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 company premises or in the vicinity of a customer. Goods and/or parts that are to be delivered to the customer in the future are stored in this warehouse. 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 of time, or the customer removes 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, the sales documents can then be issued in SAP Business One: Deliveries and outgoing invoices to the customer or to the customers referred by the consignee, depending on the consignment model. So if items are taken from the customer's consignment warehouse, 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 consignment warehouses, the goods remain the property of the supplier until they are sold to the end customer.

SAP B1 blog