Vendor Consignment Process

Vendor Consignment is a process wherein the supplier provides materials and stocks them in the purchaser’s premises. The material remains in the books of the supplier (vendor) until the same is withdrawn from the stock of the consignment and put to use. The inventory gets transferred to the books of the purchaser only when the same is removed from the consignment stock. The supplier (vendor) would not invoice the purchaser initially when they come into the premises of the purchaser. The purchaser is liable to pay the supplier (Vendor) only when the stock is withdrawn (consumed). 

Prerequisites:

1.  Special Procurement type Consignment has to be given in Material Master (Optional)
2. Create Consignment Info Record –Mandatory
3. Maintain OBYC settings for Transaction Key KON –Consignment Accounts Payable
4. Maintain Output Condition Records for Output type KONS with Transaction Code MRM1
5. Process Steps:
6. 1. Create Purchase Order with Item Category K– Consignment- T Code ME21N
   2. Goods Receipt against Consignment Purchase Order,Mvt Type 101 K – No accounting Entries – T Code MIGO-Goods Receipt
   3. Transfer the Consignment Stock to Own stock- Transfer Posting –411 K –T Code MIGO-Transfer Posting

   4. Accounting Entries:

      Here Debit means +Ve and Credit means -Ve.

      Consignment Payable – KON – Credit

      Stock – BSX – Debit

   5. 4. Invoice Settlement – MRKO

      Accounting Entries:

      Consignment Payable(KON) – Debit

      Vendor Account – Credit

   6. 4. Payment F110 or any other payment transaction

      Accounting Entries:

      Bank Account – Credit

      Vendor Account – Debit

   Regards
7. SAP-MM4U