Material transfers between sites

There are two different ways to move or transfer items or material between sites:

  • Use the Multi-Site Quantity Move form to perform simple, quick movements of inventory where there is relief of inventory in one site and receipt in another. A multi-site quantity move does not require paperwork and assumes no transit time.
  • Use a transfer order for planning and controlling stock movement and availability. When a transfer order requests that the material be transferred from the shipping site to the receiving site, the shipping site must be aware of this transfer order. If the material is being transferred to the receiving site from the shipping site, the receiving site must be aware of this transfer order. Once the transfer order is entered at one site, the system creates a complementary record automatically at the other site. In addition to in-transit visibility, transfer orders support these features:
    • Landed cost
    • Full cross-referencing capability with jobs, purchase orders, and customer orders
    • The ability of the "From" site to use price codes
    • Shipping paperwork and pro-forma invoices
    • Multiple currencies
    • Lot/serial controls

Both multi-site quantity moves and transfer orders support the use of lots and serial numbers.

In order to do moves or transfers between sites, there must be a replication rule set up for the Inventory/Transfers category between the sites. See Sharing data between sites.

Price codes

The price code determines the costs that are used in multi-site quantity moves or transfer orders. You can set up price codes for sites that report to different entities. If both sites are in the same entity, price codes are not used.

Accounts

Multi-site transfer accounting automates inter-company financial transactions and inter-company financial consolidation. SyteLine provides parameter setup for profit/cost eliminations, and offers separate account tracking for inter-company profit, cost, accounts receivable, accounts payable, sales, and cost of sales.

Accounts must be set up to establish site relationships and default account numbers that will record inter-entity financial transactions. When initiating either a move or a transfer between sites, the costs and account numbers that default for the transaction come from the Inter-Site Parameters form and are relative to the site that initiated the transaction.

Costing

Multi-site quantity moves do not use the To and From in-transit accounts of journal entries. Instead, inventory moves directly to the buyer’s inventory accounts.

Transfer orders can cause in-transit entries to occur; the act of shipping and receiving inventory moves the inventory in and out of in-transit accounts.

Transfer order costing will function in one of two ways depending on the setting of the Posting Method parameter, found on the Inter-Site Parameters form. These are the available posting methods:

  • Intra-Entity: Transfers occur at cost between sites.
  • Inter-Entity: transfers occur with revenue between sites, with the From Site making a profit.

Transit location

A stock location of type "transit" must exist in sites performing transfer orders. This location is used to hold the inventory between the time the shipment is made and the receipt performed.

Free On Board (FOB) site

The Free On Board (FOB) field on the Inter-Site Parameters form determines ownership of in-transit inventory. This is the site at which you must specify the location as "transit" for multi-site transfers.

For transfer orders, you can identify the FOB point as either the Ship Site or the Receive Site. You must specify the FOB point for all inter-company movements.

If the FOB point is the Ship Site, transfer of ownership takes place at the time of shipment. Material moves from a location in the Ship Site to a transit location in the Receive Site, and financial ownership changes from the Ship Site to the Receive Site. At receipt time, transactions are created to move the material from the transit location to a standard location at the Receive Site.

If the FOB point is the Receive Site, transfer of ownership takes place at the time of material receipt. Material moves from a location in the Ship Site to a transit location in the Ship Site. At receipt time, transactions are created to move the material from the transit location at the Ship Site to a standard location at the Receive Site. Financial ownership changes at receipt time.

FOB and costing

When a site transfers inventory to another site, inventory cost at the shipping site is relieved against the five cost categories (Material, Labor, Fixed Overhead, Variable Overhead, and Outside Services).

When a site sells inventory to a site in another entity of the company, the Inter-Entity cost of goods sold at the shipping entity is debited against the five cost categories, and inventory is relieved against all five categories.

When a site receives inventory transferred from another site, inventory is received into stock as if it were a purchased item. If the receiving site has employed standard cost, the transferred item comes into inventory using the five cost elements (Material, Labor, Fixed Overhead, Variable Overhead, or Outside Services). If the receiving site uses any other cost type, the cost comes in as Material Only.

See the online help for a list of the supported inter-site financial transaction types and examples that illustrate the different types of inter-site transactions and the resulting journal entries.

Markups

SyteLine supports two types of transfer markups:

  • Profit Markup: A site within an entity sells product to another site in a different entity at a profit. Profit is defined as any amount added by the selling entity in excess of the cost amount of the inventory shipped. This markup must be eliminated during financial consolidation. From a company-wide standpoint, entities cannot make profits by selling to each other. From Site profit must equal the To Site cost. (A markup may be established by filling in the Price Code on the Inter-Site Parameters form. This uses standard pricing logic.)
  • Cost Markup: One entity or site transfers or sells a product to another entity or site and landed costs are incurred as a result of moving inventory. The seller does not increase costs to cover these expenses. It is the responsibility of the receiving entity to correctly include these costs in inventory. The SyteLine Landed Cost functionality is used to include costs in the buying site's inventory. These costs are true costs to the receiving site, and should not be eliminated during financial consolidation.

Payments

Payments are entered at the From Site and distributed to the To Site.

When posting an A/P payment, the From Inter-Site Asset account is debited and the To Inter-Site Liability account is credited. When posting an A/R payment, the From Inter-Site Liability account is credited and the To Inter-Site Asset account is debited.

Multi-site linked MRP and APS

SyteLine can replicate transfer orders between remote sites. When either MRP or APS creates planned transfer supply orders (PLNs) for components provided by remote supply sites, the planned transfer order is replicated to the supply site as a planned demand transfer order. See Replicating planned transfer orders (Planning).

Inter-Site Parameters

The Inter-Site Parameters form must be filled out prior to any A/P, A/R, or transfer multi-site activities taking place. These parameters establish the relationship between the sites ("inter" or "intra") and identify the inter-company account numbers to be used during transactions. If your sites are set up to replicate Site Admin data, you can enter these parameters in one site and all the others will update automatically.