Warehousing of external owned stock

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Posted on by October Sky

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The client (who uses BC) has a large warehouse with excess space and wishes to earn more revenue by 2 new potential ventures. It has questions on how the following could be achieved technically on BC.

1. How it can store stock on behalf of external clients and charge them a fee for doing this. Would you set up a PO with non-inventory stock items with zero cost and add a charge line to the PO? Obviously, contracts would have to be agreed and setup, etc.

2. It also has a sister company (inter-company on BC) nearby and this intercompany partner wants to send some of its stock that it orders off its own purchase orders to the client's warehouse for storage (Represented as another location on the Intercompany partner's BC system). How could you receipt such stock into the client's warehouse and also send acknowledgement back to the intercompany partner to say receipt has occurred so that they can also show the inventory in stock on that location. Would you have to set up a dummy PO at the client warehouse or is there a more optimal method? Can any use be made of Inter-company transactions for this purpose?

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Dynamics 365 Business Central

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Valentin Castravet 31,481 Super User 2025 Season 2 on at

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It seems that for both scenarios, you need to track item quantities. For this reason, I recommend using items with the type 'Inventory' and enabling the 'Inventory Value Zero' field on the item card. This way, the items won’t carry any value. The issue with using items of type 'Non-Inventory' is that they won’t track quantities.

For the second scenario, yes, I would use purchase orders to transfer the inventory.

Hope this helps as well - The Fourth Item Type in Dynamics 365 Business Central that Nobody Knows About - Dynamics 365 Business Central Insights

Valentin Castravet
Work: Zander ERP Services
Blog: Dynamics 365 Business Central Insights
LinkedIn: www.linkedin.com/in/valentin-c-0500a247/

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Gerardo Rentería Ga... 25,230 Most Valuable Professional on at

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Hi

I hope this can help you

1) Manage Customers' Consignment stock in Business Central

Best

GR

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YUN ZHU 95,729 Super User 2025 Season 2 on at

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Generally, a separate location is set up for each customer, and the quantity and amount are managed by transferring the transaction to the customer's location. Then, based on the value or size of the items, a certain location management fee is charged.

But you only need to manage the quantity, not the amount. You can use Valentin's method, but if this item is used for customer location and you also need to purchase it on a regular basis, it will be a bit difficult.

I would suggest managing the amounts as well, just posting to a special GL Account, removed from your inventory reports.

Hope this helps as well.

Thanks.

ZHU

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Valentin Castravet 31,481 Super User 2025 Season 2 on at

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From my understanding, in both scenarios, the stock has a value of zero, so there’s no value to track. It's also not the same items that you sell internally. But if it is, and if you use the same item cards for both your internal inventory (which has value) and third-party inventory (which has no value), your item costing (i.e. unit cost field on the item card) will likely be incorrect unless you take extensive precautions. To post to a 'special gl account' you need to use separate posting groups. In my opinion, it’s much easier and best practice to use separate item cards for inventory owned by third parties than changing your posting groups every transaction for these items.

To answer some of your other questions:

1. If you're receiving these items, which it sounds like you are based on your question then yes, you can use a PO to do so. You can even use an item journal with a positive adjustment but the PO gives you the necessary documentation to say you received the items. To charge the customer for these items you would however need to use a sales order/invoice.

2. You can again use a PO to receive these items. You can use an intercompany PO if you would like to.

Valentin Castravet
Work: Zander ERP Services
Blog: Dynamics 365 Business Central Insights
LinkedIn: www.linkedin.com/in/valentin-c-0500a247/

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October Sky 548 on at

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Thanks for your reply Valetin

As regards issue # 2, the intercompany PO, I'm not sure how this can work fully. While I understand that you can send an intercompany PO to the IC partner for them to receive and have it with 'Inventory Flag zero' but that doesn't deal representing the item in stock and at a cost on the sending intercompany partner. I want to be able to show this as stock in another location and I would not be able to have the flag 'Inventory Flag zero' set on the item.

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