SAP MM Tutorials: Vendor Consignment
Vendor consignment process in SAP is used when a vendor provides your company materials on loan. The materials are kept in the warehouse of your company until you withdraw the said materials for processing. Then, the liability is created for the vendor and a payment is done to the vendor on agreed intervals, e.g. weekly or monthly.
For the vendor consignment process in SAP to work, you first need to agree on pricing with the vendor. The prices are a kept in consignment info records in the SAP system. The prices can be automatically copied to purchase orders from info records.
Key Process Design for the Consignment process for Vendors in SAP – Consignment has been designed as a special procurement type in SAP
The consignment stock is not valuated till the time it is consumed or withdrawn, since theoretically, it lies in the books of the supplier (Vendor)
The consignment material number is the same as that of a material in unrestricted stock in the purchaser’s books
Since the sourcing of a material can happen from multiple parties, the consignment stock is maintained at the level of each supplier or vendor.
The price of the consignment is maintained in the purchasing info records (PIR) of the info category, Consignment
When the withdrawal happens from the consignment stock of a supplier, the goods receipt in the purchaser’s books happens at the price maintained in the purchasing info records of type consignment for that vendor and material combination.
The goods receipt against a consignment purchase order is always non valuated.
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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.Create Purchase Order with Item Category K– Consignment- T Code ME21N
6.Goods Receipt against Consignment Purchase Order,Mvt Type 101 K – No accounting Entries – T Code MIGO-Goods Receipt
7.Transfer the Consignment Stock to Own stock- Transfer Posting –411 K –T Code MIGO-Transfer Posting
8.Invoice Settlement – MRKO
9.Payment F110 or any other payment transaction
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.Create Purchase Order with Item Category K– Consignment- T Code ME21N
6.Goods Receipt against Consignment Purchase Order,Mvt Type 101 K – No accounting Entries – T Code MIGO-Goods Receipt
7.Transfer the Consignment Stock to Own stock- Transfer Posting –411 K –T Code MIGO-Transfer Posting
8.Invoice Settlement – MRKO
9.Payment F110 or any other payment transaction
Process Steps:
Accounting Entries:
Consignment Payable – KON – Credit
Stock – BSX – Debit
Accounting Entries:
Consignment Payable(KON) – Debit
Vendor Account – Credit
Accounting Entries:
Bank Account – Credit
Vendor Account – Debit
Accounting Entries:
Consignment Payable – KON – Credit
Stock – BSX – Debit
Accounting Entries:
Consignment Payable(KON) – Debit
Vendor Account – Credit
Accounting Entries:
Bank Account – Credit
Vendor Account – Debit
SAP Vendor consignment process :
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