Consignment stock is goods held by one party (typically a customer or distributor) but still legally owned by the supplier until the stock is sold or consumed. The holder stores and uses the stock but does not pay for it until that point. In UK distribution, consignment arrangements are common where a supplier wants product readily available at a customer's site without requiring a committed purchase order upfront. Managing consignment stock correctly in Microsoft Dynamics 365 Business Central requires careful separation from owned stock in the item ledger.
How consignment stock works in Business Central
Business Central handles consignment stock through dedicated location codes or bin codes that identify the stock as consigned rather than owned. When stock is despatched to the consignment location, a transfer is posted but no sales invoice is raised. The item ledger records the quantity and location. When the customer confirms consumption or sale, a sales invoice is raised against the consumed quantity and the stock is cleared from the consignment location. Periodic reconciliation reports compare quantities despatched against quantities invoiced to identify any discrepancies.
Consignment stock in practice
- A components supplier places stock at a manufacturer's facility under a consignment agreement. Business Central tracks the stock at the customer's location and raises invoices only as each production run consumes the parts.
- A drinks distributor holds consignment stock at a venue. The venue reports weekly consumption and the distributor raises a single invoice covering the period, reconciled against Business Central stock records.
- A business receiving consignment stock from a supplier uses Business Central to track the supplier's stock separately from its own, producing a monthly statement of consumption to send back to the supplier.
- A finance director uses Business Central's stock valuation report to confirm that consignment stock held at customers is excluded from the balance sheet asset value, as ownership has not yet transferred.
How Advantage configures consignment stock in Business Central
Advantage configures location structures, posting groups and stock reconciliation reports to support consignment arrangements in Business Central. We set up the workflows for consumption reporting, invoice triggering and period-end reconciliation so that consignment stock is tracked accurately without manual intervention between reporting cycles.
See how Business Central manages complex stock arrangements →
Frequently Asked Questions
Common questions about consignment stock management in Business Central.
