Ordinary buying means purchase, stock, consume. Several real-world arrangements do not fit that pattern; three of the important ones are covered here.
Consignment stock
Consignment means the vendor stock sits in your warehouse and you pay only for what you consume.
The key point is that ownership stays with the vendor, so receiving creates no accounting document.
| Stage | Stock | Accounting |
|---|---|---|
| Receipt (movement type 101) | Consignment stock increases | No entry; the vendor owns it |
| Consumption (201K and similar) | Consignment stock decreases | Dr Expense / Cr Payables |
| Transfer to own stock (411K) | Becomes own stock | Dr Inventory / Cr Payables |
| Settlement (MRKO) | โ | Generates the invoice for what was consumed |
The advantage is holding stock on site without tying up cash until it is used. For the supplier, stock close to the customer secures the business.
Subcontracting
Subcontracting means supplying components to an external processor and receiving a finished item back, using item category L.
The components sit at the vendor site but remain your property, tracked as stock provided to vendor.
| Stage | Movement type | What happens |
|---|---|---|
| Provide components | 541 | Transfer to vendor-held stock; ownership retained |
| Receive the finished item | 101 | Finished item enters own stock |
| Consume components | 543 | Automatically consumed from vendor-held stock |
| Invoice verification | โ | Only the processing fee is paid |
The receipt (101) automatically triggers the component consumption (543) based on the subcontracting BOM. Only the processing fee is payable, because the components were already yours, and the finished item is valued at components plus fee.
Stock transport orders
A stock transport order moves stock between your own locations. A plain transfer posting (movement type 301) would also move it, but an STO offers more.
- Sending and receiving are separated in time
- Goods in transit become visible as a distinct stock category
- Full shipping processing through deliveries, integrating with SD
- Across company codes, it can be handled as an internal sale
| Kind | Company codes | Accounting |
|---|---|---|
| Intra-company STO | Same | A transfer only; no profit arises |
| Cross-company STO | Different | Sale and purchase arise; intercompany profit must be eliminated |