Stock in transit

[IndrajitRoy]

Hi Gurus,

In case of imports, Should stock in transit materials be treated as part of inventory stock. The incoterm is FOB. Do I really have to update my inventory account to own the goods. What is the procedure. Please explain.

Warm Regards

Jeet

[csaba_szommer]

MRP has nothing to do with this question.

In normal SAP you do not consider the INCOTERMS, the GR happens if you receive the goods in your SLoc. The situation is same with GI - independently from the INCOTERMS, you post GI if the goods leave you SLoc.

Of course, from business point of view it is very important when the goods are delivered and handed over / taken over. But sorrowfully, this is not solved in standard system, as per my best knowledge.

What you can do is to use workaround.

In case of GR you can do a logical SLoc and receive the goods (do GR) if the ownership has changed. After that a SLoc to SLoc stock transfer can be used to map the physical goods transfer.

In case of GI you can use POD and use the confirmed date for billing.

Regards,

Csaba

[IndrajitRoy]

Thank you for your prompt answer. From an accounting perspective-if I do an IV only during handover at origin port( provided vendor sends the Invoice). Can I claim that I officially own the goods (This would be necessary for insurance etc.) When I actually receive the goods, I do a GR. This completes the Gr/IR clearing( we will call it goods in transit account)

[csaba_szommer]

What you do in SAP is one thing, what really matters is reality itslef:

http://www.iccwbo.org/incoterms/preambles/pdf/FOB.pdf

"Free on Board" means that the seller deliveres when the goods pass the ship's rail at the name port of shipment. This means...

Your question:

From an accounting perspective-if I do an IV only during handover at origin port( provided vendor sends the Invoice). Can I claim that I officially own the goods 

In my opinion, you can claim that you own the goods if the goods are over the rail of the ship. Of course, you have to have some docuemnts about this as well (CMR, shipping note).

So, I think this is not SAP specific question. As I mentioned, you can do in SAP what you want, it will have no meaning from business point of view. But if you have the goods on board with the proper, signed documents, you can claim that you own the goods.

In SAP, the posting date means that the goods are delivered. If you won't use logical SLoc, there might be discrepancy between the real date of delivery and SAP's posting date.

If I were your vendor and if I had a debate over the ownership the goods, I wouldn't take care of what kind of ERP system you have and what kind of data you have in your ERP system. What really matters the agreement (PO / contract / etc), official documents (delivery note, CMR, bill of lading, etc.) and the real physical process.

Regards,

Csaba

Edited by: Csaba Szommer on Apr 13, 2009 11:25 AM