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Mar 13 at 12:26 PM

Cross Company Transactions with Consignment Processing



We have a situation where a stock item is delivered from the US to a customer in Europe as a consignment stock. However, the regulations require to show that the stock was consigned from a local selling organization and hence the US cannot directly show this as a consignment transaction in its books.

The following is desired:

1. Sales order is created in the sales organization for Europe (e.g. Germany ) for consignment fill up

2. The delivery of the consignment fill up needs to be sent from US to the end customer. This needs to be treated as a intercompany sale in the US to the Selling Entity in Germany

3. When the goods are delivered from the US to the customer, a consignment stock needs to be shown at the customer's end. However, this will need to be shown as a consignment stock that is reported by the selling company in Germany

4. When the goods are consumed, the Consignment stock in Germany will be shown as a sale to the customer.

This above situation is a cross between intercompany transaction and consignment sale. Consignment sale is typically shown as a stock in the plant. However, in the above case, the plant in Germany is booking a purchase ( due to intercompany ), but still needs to show a consigned stock in its books and issue of consignment needs to be reflected as a sale in Germany.

Would appreciate any inputs from members of the possible approach for this scenario.