Häufig gestellte Fragen
What is a consignment warehouse, simply explained?
A consignment warehouse is a stock of goods at the customer's site: the stored goods are physically held by the customer but legally remain the property of the supplier until they are withdrawn. Only when the customer removes material from the warehouse and consumes it does ownership transfer, and the supplier may then invoice the withdrawn quantity. The model thus separates physical possession from legal ownership, which coincide in a conventional purchase. It is used above all in industries with continuous material demand such as automotive supply, mechanical engineering, C-parts supply or medical consumables.
When does ownership of the goods transfer and when does invoicing take place?
Ownership does not transfer upon delivery into the warehouse, but only at the moment the customer withdraws or consumes the goods. This withdrawal event is also the relevant point in time for accounting purposes, from which the supplier may invoice. In practice, withdrawals are recorded precisely by quantity and time, for example by scanning in the ERP system, and invoiced at defined intervals. The credit note procedure (self-billing by the customer) is frequently used, in which the customer reports the quantities consumed and the supplier receives a consolidated settlement.
Who must carry the goods in the consignment warehouse on their balance sheet – supplier or customer?
As long as the goods lie in the consignment warehouse, they remain the property of the supplier and thus part of the supplier's inventory assets; they must be recognised on the supplier's balance sheet and included in the supplier's stocktaking. Until withdrawal, the consignment stock does not appear on the customer's balance sheet, as it constitutes neither the customer's property nor economic inventory. Legally, in the absence of dedicated codification in Germany, the consignment warehouse agreement is usually classified as a mixed contract with elements of warehousing and sales law. Only upon withdrawal does the asset move into the customer's books, while the supplier realises the revenue at that point.
Which VAT particularities apply to consignment warehouses?
For cross-border EU deliveries, the consignment stock rule of Section 6b UStG has applied since the Quick Fixes came into force on 1 January 2020, and the BMF specified it further in a circular dated 10 December 2021. Under certain conditions, it allows the supplier to account for an intra-Community supply only upon withdrawal and to avoid VAT registration in the country of destination. Among other things, it requires that the future buyer is already known when transport begins and that a separate register is kept. If the goods are not withdrawn within twelve months or one of the conditions ceases to apply, an intra-Community transfer is deemed to occur on the following day, which cancels the simplification.
How does a consignment warehouse differ from vendor-managed inventory (VMI) and just-in-time?
Vendor-managed inventory primarily governs responsibility for replenishment control: the supplier manages the stock at the customer's site autonomously, without this necessarily affecting the question of ownership. The consignment model, by contrast, additionally and above all concerns ownership, which remains with the supplier until withdrawal; in practice, the two concepts are often combined. Just-in-time follows a different logic, as goods there are delivered in sync with demand without a stock buffer, whereas a consignment warehouse deliberately maintains a buffer at the point of consumption. A consignment warehouse can use VMI as its control principle, but is clearly distinguished from it by the deferred transfer of ownership.
What requirements does a consignment warehouse place on the ERP system?
The central requirement is to consistently separate possession and ownership: the ERP must manage the consignment stock as its own value-neutral special stock type that can be reported by quantity at any time but does not flow into the customer's assets. It should be possible to convert withdrawals into settlements automatically, ideally with integrated self-billing via the credit note procedure and interfaces for supplier data exchange, for example via EDI. Since stocks must be reconciled regularly between the parties, a reliable stocktaking function covering third-party property and end-to-end tracking of goods receipt, withdrawal and settlement are important. Mid-market and enterprise systems usually offer special stock management for consignment as a standard function, although the scope of functions and terminology vary by vendor.