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Brazil consignment process

In Brazil, SAP's consignment process allows vendors to retain ownership of materials until they are withdrawn by the customer, differing from standard inventory practices. Key aspects include deferred payment, specific SAP modules for management, and a defined process flow from consignment fill-up to invoicing and returns. Important considerations involve electronic invoicing (NF-e), tax implications, and necessary configuration for compliance with local regulations.

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Brazil consignment process

In Brazil, SAP's consignment process allows vendors to retain ownership of materials until they are withdrawn by the customer, differing from standard inventory practices. Key aspects include deferred payment, specific SAP modules for management, and a defined process flow from consignment fill-up to invoicing and returns. Important considerations involve electronic invoicing (NF-e), tax implications, and necessary configuration for compliance with local regulations.

Uploaded by

SOUMEN DAS
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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In Brazil, SAP's consignment process, often referred to as "consignment on

hand" or "consignação", involves a vendor providing materials to a


customer, with the vendor retaining ownership until the materials are
withdrawn from consignment stock. This differs from standard inventory
where the vendor transfers ownership upon delivery.

Key Aspects of the Consignment Process in SAP (Brazilian Localization):


 Vendor as Owner:
The vendor remains the legal owner of the materials until they are consumed or
returned, even if the materials are physically located at the customer's site.
 Payment Deferred:
Payment for the materials is due only after they are withdrawn from consignment
stock, typically at set intervals, like monthly, after a certain period.
 SAP Modules:
SAP modules like Materials Management (MM), Sales and Distribution (SD), and
Financial Accounting (FI) are used to manage the consignment process.
 Process Flow:
1. Consignment Fill-Up: The vendor supplies materials and stores them at the
customer's location, which is a stock fill-up at the warehouse. No accounting entries
are typically generated during this phase.
2. Consignment Issue: When the customer uses the materials, the "Issue" step is
performed.
3. Goods Issue: The material is removed from the consignment stock and moves into the
customer's own inventory. Accounting entries are generated, such as COGS debit and
stock credit.
4. Invoicing: The invoice is generated based on the materials issued from the
consignment stock.
5. Consignment Return: If the customer returns unsold materials, this is the "Return"
step.
6. Pick-up: The returned materials are picked up by the vendor.
 SAP Features:
 Item Category K: Used in purchase orders to indicate that the item is a consignment
item.
 Movement Type 821: Specifically for Brazilian consignment goods receipt.
 Special Stock Indicator K: Used to identify consignment stock.
 Specific Order Types: SAP uses specific order types like KBB for consignment fill-
ups, according to some SAP communities.

Important Considerations:
 NF-e (Electronic Tax Invoice): Consignment processes in Brazil often involve NF-e
for electronic invoicing.
 Tax Implications: Brazilian tax regulations (like ICMS, ICST, IPI) need to be
considered.
 Configuration: The consignment process in SAP requires configuration based on
the specific business needs and tax regulations in Brazil.

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