Inventory in transit solving! Definition of in transit inventory

The first thing to understand is what in-transit inventory means.

If Company A procures goods from Company B, and A B is not an affiliate, then there are 2 of the following:

The company ships the goods and issues an invoice, but the invoice and the goods do not reach Company A, then for A, I don't know about the shipment, then I don't need to take any action.

2.Company B delivers the goods and issues an invoice, but the goods have not arrived, but the invoice has arrived, then Company A has generated a voucher and borrowed AP loan: GRIR increases.

When the goods were received, Company A generated another voucher with an increase in the borrowed inventory and a decrease in the borrowed GRIR.

At this stage when the ticket arrives and the goods are not arrived, it is in transit inventory for Company A.

If A B is an affiliated company, for the purpose of mutual internal settlement and consolidation of financial statements, generally speaking, the invoicing of Company B and the verification of the invoice of Company A are automatically completed by the system, so the possibility of situation 2 is greatly increased. Based on the basic definition of Scenario 2, in-transit inventory belongs to Company A.

Leave a question for the subject: If the receipt occurs earlier than the invoice verification at the end of the month, what should be done at the system level?

There are two main types:

1. The property rights of the goods you have purchased have been transferred to you abroad, and your inventory is counted, but it has not yet arrived in the warehouse;

2. The property rights of the goods you have sold also need to be transferred abroad, counting your inventory, but it has not yet reached foreign customers.

I think this should be judged according to the definition of assets. An important characteristic of an asset is the resources owned or controlled by the enterprise. Whether the ownership of the inventory is transferred, and whether the risk is transferred.

If it has been transferred, the in-transit inventory belongs to the company that received the goods. Let's take a look at the sales contract, whether there is a specific agreement on this aspect, and then make a judgment.

In-transit inventory can also be left out of the inventory, but it is increasingly attracting the attention of enterprises, which can enable enterprises to use in-transit inventory to form a flexible strategy.

For companies, in-transit inventory is necessary to fulfill replenishment orders. From the perspective of enterprise logistics management, in-transit inventory adds two kinds of complexity to the ** chain: first, although in-transit inventory cannot be used, it represents a real asset; Second, there is a high degree of uncertainty in in-transit inventory because businesses don't know where the means of transport are or when they are likely to arrive.

While satellite communications technology has reduced this cause of uncertainty, companies will still be limited in their access to this information. At present, in the operation of enterprises, more and more attention is paid to the transportation and delivery of small batches and high frequencies, and the enterprises are actively carrying out just-in-time strategies, so the proportion of in-transit inventory in total assets is gradually increasing. The inventory strategy of modern companies focuses more attention on how to reduce the amount of inventory in transit and the uncertainties associated with it.