Business Central consignment inventory, tracked and valued correctly

Business Central consignment inventory for customers and vendors

With customer consignment, you ship goods to a customer's site. You keep ownership until they use or sell them. The stock is still yours. So it must stay in your inventory value while it sits elsewhere. The sale and the invoice come later, when the customer reports what it used.

Vendor consignment is the mirror image. A supplier's goods sit in your warehouse, and you pay only for what you take. Here the stock is on your shelves but not yours. So staff should be able to count and pick it. It should not show as an asset until you use it.

Setting up Business Central consignment inventory at customer sites

Each consignment customer gets a location in Business Central. Goods move there on a transfer order. That changes where the system holds the quantity. It does not change value or ownership. The item availability pages then show exactly what each customer holds for you. No spreadsheet is needed.

When the customer reports usage, you raise a sales order from that location and post it. Inventory decreases. Cost of goods sold is recognized, and the invoice goes out. A reorder point on a stockkeeping unit for that location can drive refills. So the planning worksheet suggests the next transfer.

Handling vendor-owned stock on your shelves

Standard Business Central values every quantity it holds. For consignment inventory, that makes vendor consignment the harder case. One common design keeps vendor stock in its own location. It records the purchase only when you use the goods. A transfer or reclass entry into owned stock does that, with the purchase receipt.

Another design uses a small extension or an AppSource add-on. It tracks consigned stock outside inventory value. It then raises the purchase document on use. The right choice depends on volume. It also depends on whether lot or serial numbers must follow the goods from the day they arrive. We lay out both for your controller.

How we implement Business Central consignment inventory

First, we map the physical and legal flow on one page. We mark the exact moment ownership changes. We agree that diagram with finance and the warehouse team before any setup. Every later choice about locations, posting groups and documents follows from it. It also settles arguments later.

Then we create locations, transfer routes and inventory posting setup in a sandbox. We run a full cycle: place stock, report usage, invoice, replenish, count. Finance checks the ledger after each step. We finish with a usage import, often from a spreadsheet or EDI message. So no one types sales orders by hand.

Counting and reconciling stock you cannot see

Business Central consignment inventory at a customer's site is out of sight. Gaps build up quietly. We schedule physical inventory journals per consignment location. Then we agree who counts, how your team checks gaps and who pays for a shortfall. The result posts as an adjustment to that location only.

A consignment statement report gives both parties something to sign. It lists opening quantity, transfers in, usage and closing quantity per item. For finance, an inventory value report filtered by location splits consigned stock from warehouse stock. Auditors often ask to see that split. We build both as standard.

Business Central consignment inventory questions

Does Business Central consignment inventory need a special module?

There is no dedicated consignment module. Customer consignment works well with standard locations and transfer orders. Vendor consignment needs its own design or an add-on. Standard inventory gives value to whatever quantity is on hand.

Will consigned stock at customers show in our inventory value?

Yes, and it should, because you still own it. It appears under the consignment location. So reports show it apart from stock in your own warehouse. It leaves inventory only when the sale from that location is posted.

Can lot and serial numbers be tracked at the customer site?

Yes. Item tracking follows the goods through the transfer order. It carries on into the consignment location and the sales shipment. That keeps recall and expiry data intact. You also see which lots each customer holds.

How do customers report what they used?

Through whatever suits them. That might be an EDI message, a spreadsheet upload, a portal or an email. We build an import that turns the usage report into sales orders from the right location. It also flags quantities above what the system records.

Do consignment locations need warehouse handling switched on?

Most often not. A consignment location is a plain location. It needs no bins, picks or put-aways. Your staff do not work in it. Your main warehouse keeps its full setup. It ships the transfer in the usual way.

Related inventory pages

Consignment builds on ordinary location, transfer and tracking setup. These pages explain those foundations. They also cover the counting routine that keeps off-site stock accurate over time. Read them in that order. Our consultants can walk your team through each one. We answer questions during US business hours. Business Central consignment inventory relies on all of them. For the product detail, see Business Central documentation on Microsoft Learn.