In Microsoft Dynamics 365 Business Central (Inventory and Warehouse Management), how do I… Manage Consignment Stock at a Customer Location

This post is part of the In Microsoft Dynamics 365 Business Central (Inventory and Warehouse Management), how do I… series and of the wider In Microsoft Dynamics 365 Business Central, how do I… series which I am posting as I familiarise myself with Microsoft Dynamics 365 Business Central.

This was a question which came up recently from a client for a new project. They have some larger customers who hold stock in their own warehouse, under a system referred to as consignment stock, but which they have not yet purchased; it will only be purchased then this customer sold the goods to their own customers and the questions was how to manage this consignment system within Business Central.

The cleanest was to create a new location in Business Central, using the customer name as the Location Name and to use the Inventory Transfer functionality to transfer stock from a company warehouse to the consignment warehouse.

When the customer sent confirmation that some of the goods had been consumed, a sales order was raised for the consignment location, thereby reducing the stock on hand.

This consignment warehouse was setup with no specific warehouse functionality setup for receipts, put-aways, picks or shipments, so processing of transfer receipts and shipments were done from the relevant document pages.

The benefits of doing it this way, was that by using a location named after the customer, an Inventory Posting Group with related Inventory Posting Setup were created which allowed different G/L accounts and therefore reporting to be used, while the ownership of the stock remained with the company rather than the customer.