Inventory Transfer Methods

There are two Inventory Transfer methods used within Enterprise. They are:

  • Direct Transfers
  • In-Transit Transfers

Here are details on both Inventory Transfer methods:

  1. Direct Transfers:

    When a Direct Transfer is processed, the quantity on-hand and the Inventory control account in the General Ledger are reduced in the sending warehouse and increased in the receiving warehouse as a byproduct of Invoicing. The Direct Transfer logic is triggered when the Customer's Class of Trade (COT) code is STO, which in turn triggers TAT code TRN to be assigned to each Order/Invoice detail line. Special processing associated with TAT code TRN controls the updating.

    Here's an example of a Direct Transfer from warehouse 01 to warehouse 02:

    • The sending warehouse is selected during order entry.

    • A customer record is created in SU13 for the receiving warehouse. The customer code = #02 and the sales office is 02; this identifies the receiving or destination warehouse.

    • Customer #02 has a COT code = STO; a TAT code of TRN is automatically assigned to all detail lines on the sales order.

    • An order is placed for customer #02. All detail lines are priced at 100% discount, thereby generating a no-charge invoice. This is the case when TAT code TRN is set up in Maintain TAT Codes (IN02) with the 'Update Dollar Sales' field unselected (the checkbox remains unchecked for this field).

    • Stock is reserved in the sending warehouse.

    • The sales order is picked and shipped.

    • The sales order is invoiced; a no-charge invoice prints. The invoice cycle (IN43/IN44) is completed.

    • Booked units update as per the setting in the 'Update Demand' field in IN02 for the TRN TAT code.

    • Customer and product sales master files are NOT updated.

    • Quantity on hand is decreased in the sending location and quantity on hand is increased in the receiving location.

    • Inventory for the receiving location is debited; Inventory for the sending location is credited. The inventory GL accounts are assigned from CC00/Invoicing/General Ledger.

    • You can chose to print/suppress the detail lines on the no-charge invoice for transfers using the 'Print Branch Transfer detail on invoices' field in Maintain Sales Office/Whse Numbers (CC96).

    • You can also chose to update invoice details to the Invoice History master file using the 'Update Invoice History with whse transfers' field in Company Control Initialization (CC00/Invoicing).

  2. In-Transit Transfers:

    When an In-Transit Transfer is processed, the quantity on-hand and the Inventory control account in the General Ledger are reduced in the sending warehouse and the Transfers In-Transit control account is increased as a by-product of Invoicing. When the goods are received at the receiving warehouse, the quantity on hand and the Inventory control account in the receiving warehouse are increased and the Transfers In-Transit control account it decreased. The GL control accounts for these transfers are assigned in CC00/Invoicing.

    The In-Transit Transfer logic is triggered when the Customer's COT code is WHS, which in turn triggers TAT code WHS to be assigned to each Order/Invoice detail line. Special processing associated with TAT code WHS controls the updating.

    Here's an example of an In-Transit Transfer between two warehouses:

    • The sending warehouse is selected during Order Entry.

    • A customer record is created in SU13 for the receiving warehouse. The customer code = #02 with a sales office of 02; this identifies the receiving or destination warehouse.

    • Customer #02 has a COT code = WHS; a TAT code of WHS is automatically assigned to all detail lines on the sales order.

    • An order is entered for for customer #02. All detail lines are priced at 100% discount, thereby generating a no-charge invoice. This is the case when TAT code WHS is set up in IN02 with the 'Update Dollar Sales' field unselected (the checkbox remains unchecked for this field).

    • Stock is reserved in the sending warehouse and quantity on order is increased in the receiving location.

    • The sales order is picked and shipped.

    • The sales order is invoiced; a no-charge invoice prints. The invoice cycle (IN43/IN44) is completed.

    • Booked units update as per the setting in the 'Update Demand' field in IN02 for WHS TAT code.

    • Customer and Product Sales master files are NOT updated.

    • Quantity on hand is decreased in the sending location.

    • The Transfers In-Transit account is debited; the Inventory control account for the sending location is credited.

    • IC58 can be used to print a listing of in-transit shipments.

    • When the goods are received at the destination or receiving location, the receipt is confirmed using Receive Branch Transfers (IC55). The quantity on Order is reduced and the quantity on-hand is increased.

    • The Transfers-In Transit account is credited; the Inventory Control account for the receiving location is debited.

    • You can chose to print/suppress the detail lines on the no-charge invoice for transfers using the 'Print Branch Transfer detail on invoices' field in CC96.

    • You can also chose to update invoice details to the Invoice History master file using the 'Update Invoice History with whse transfers' field in CC00/Invoicing.

    • Note: Freight may be optionally added into the Product cost (the 'Freight Percentage' is defined in Maintain Inventory Tables (IM09/Warehouse Shipping Rates). The G/L distribution with freight added to the cost is determined as follows:

      • Transfer Product from warehouse 01 to warehouse 02.

      • Product cost in warehouse 01 = $100.00

      • Freight factor incurred when shipping from 01 to 02 is 1%

      • Warehouse 01:
          DR In-Transit Clearing

          100.00

          		  
          CR Inventory-Whse 01  

          100.00

      • Warehouse 02:
          DR Inventory-Whse 02

          101.00

          		  
          CR In-Transit Clearing   100.00
          CR Freight Clearing   1.00

 
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