Quarantine inventory payable to supplier

The Payable to Supplier parameter in the Inventory Handling Parameters (whinh0100m000) session determines the payability of quarantine inventory fulfilling these conditions:

  • Origin: purchase orders or purchase schedules
  • Quarantined after rejection during inbound inspection

This parameter does not apply to items quarantined after outbound inspection.

For items rejected in inbound inspections, payable-to-supplier allows invoicing and payment of the entire received quantity before the warehousing inspection and quarantine processes are completed. This avoids risking late payments to the supplier due to time-consuming disposition procedures. Settlements for scrapped, destroyed, or returned goods can take place after quarantine processing.

For this purpose, LN registers the received quantity as approved on the originating purchase order line when the receipt is confirmed. LN does not update the approved quantity to the purchase order while the items are handled in the Warehouse Inspections (whinh3122m000), the Quarantine Inventory (whwmd2171m000), or the Quarantine Inventory Disposition (whwmd2172m000) session. These updates follow after the quantities are processed.

After rejecting inventory in the Warehouse Inspections (whinh3122m000) session, LN generates no financial integration transactions or (potential) back orders.

Note

For purchased quarantined items originating from purchase orders or purchase schedules, the rework options and the reclassify option are unavailable if payable-to-supplier is not activated. This is because if the Payable to Supplier check box is cleared, the supplier owns the rejected items and the rejected goods will not be paid, whereas rework or reclassification is only allowed if the supplier is paid.

Using payable-to-supplier, after:

  • Accepting quarantine inventory with disposition Use As Is or No Fault Found, LN creates no new purchase receipt but directly creates inbound advice to the storage location. If the warehouse is not location controlled, LN directly puts away the accepted inventory.
  • Scrapping quarantine inventory, LN creates no back orders nor does settlement with the supplier take place at this stage, because the items were paid for after receipt.
  • Returning quarantine inventory to the vendor, the ownership of customer owned or consigned goods does not change. For company owned return items, the supplier is charged, because the items were paid for after receipt.
  • Disposition items in the quarantine location are valuated identically to items in receipt locations. On the inventory valuation report, disposition items are listed with the original receipt value.

Using the payable to supplier method, the user handles the items in the same way as the standard quarantine handling method: through the Warehouse Inspections (whinh3122m000), the Quarantine Inventory (whwmd2171m000) and/or the Quarantine Inventory Disposition (whwmd2172m000) sessions.

For each disposition decision that the user takes, some steps that LN completes when payable-to-supplier is activated are different from quarantine handling without payable-to-supplier.

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