Consignment and pipeline settlement
Use
Consignment m aterial is stored at your company premises but belongs to a vendor. The vendor supplies these goods so that they are available to you at any time, but does not initially invoice you for the goods. Only when you have withdrawn stock does payment become due for the quantities used.
Pipeline m aterial flows directly into the production process. This could be from a pipeline, for example, oil, from a pipe, for example, water, or from a cable, for example, electricity. Payment is due after each withdrawal.
The use of consignment and pipeline settlement reduces the cost of stockholding in the company by:
Reducing the flow of paper and administration work
Minimizing transport costs by using collective transports
And, for a modest capital tie-up, increased security of supply is guaranteed with minimal inventory levels and short lead times.
Features
You do not expect an invoice from the vendor for goods withdrawals from consignment stocks or a pipeline. Instead you settle posted withdrawals and return deliveries yourself and send the vendor a statement of the settlement. You can perform this settlement periodically in the background. The following documents can be involved:
Invoices
Credit memos
Consignment settlement is connected to message determination. As a result, you can define a form in Customizing. A message record is created during each settlement. This message record completes the form. Depending on the system settings, you can send this form to the vendor immediately on posting or at a later time.
Note
If you want to change document header data for consignment settlements, use the Business Add-In MRM_MRKO_HDAT_MODIFY
. For more information, see the documentation for the Business Add-In.
Canceling Consignment Documents
Cancel the documents in Inventory Management and start consignment settlement. The system generates a credit memo for the returned document. If the consignment prices have changed since the original goods receipt, post the credit memo in Financial Accounting. Clear the invoice and the credit memo in Financial Accounting.
Constraints
Consignment and pipeline settlement is not connected to the purchasing information system, because the purchase order history is not updated during consignment settlements.
You cannot make any net postings during consignment settlement. This means that you cannot calculate any cash discounts. To take cash discounts into account, you must include these in the consignment price. This ensures that the cash discount is implicitly posted during the goods withdrawal and settlement.
You cannot settle delivery costs.
Caution
Note, that consignment settlement cannot be performed simultaneously by several users. The material documents are not blocked during settlement, which means that duplicate settlement documents can be created.
The liabilities account for consignment settlement must not be flagged as Post automatically only
, and must not be defined as a reconciliation account.
See also: