Infor SyteLine3 min readNetray Engineering TeamUpdated March 4, 2025

How to Configure Consignment Inventory in SyteLine

Consignment inventory in SyteLine enables you to hold vendor-owned stock at your facility and pay only upon consumption, or place your inventory at customer locations with payment triggered by their usage. This model reduces working capital requirements and improves supply chain responsiveness. Configuring consignment properly requires careful setup of ownership tracking, consumption triggers, and billing workflows to ensure accurate financial reporting for both parties.

Set Up Vendor Consignment Warehouses and Items

Create a dedicated consignment warehouse on the Warehouses form (Whses IDO) with the Consignment flag enabled. This warehouse tracks vendor-owned inventory separately from your owned stock for clear ownership distinction. On the Vendor Contract form under Purchasing > Setup, define consignment terms including consumption reporting frequency, pricing agreements, and payment terms. Activate consignment items at the consignment warehouse using the Item Warehouse form (ItemWhse IDO). Configure the Consignment Vendor field to link each item-warehouse combination to the supplying vendor for automatic billing.

Create dedicated consignment warehouse with Consignment flag enabled on Warehouses form
Define consignment terms and pricing on Vendor Contract form under Purchasing > Setup
Activate consignment items at the consignment warehouse on Item Warehouse form
Link each consignment item to its supplying vendor via Consignment Vendor field

Process Consignment Receipts and Consumption

Receive vendor consignment stock using the Consignment Receipt form under Inventory > Consignment. Unlike standard PO receipts, consignment receipts do not create AP liability—the inventory is recorded at the consignment warehouse without financial impact. When material is consumed (issued to production or transferred to owned inventory), use the Consignment Consumption form (ConsignConsume IDO) to record usage. Consumption creates an AP voucher to the consigning vendor based on contract pricing. The Consignment Inventory Report shows current vendor-owned stock levels and consumption history.

Receive vendor stock on Consignment Receipt form without creating AP liability
Record material consumption on Consignment Consumption form to trigger vendor billing
Consumption automatically creates AP voucher based on vendor contract pricing
Monitor vendor-owned stock levels and usage via Consignment Inventory Report

Configure Customer Consignment and Usage Reporting

For outbound consignment where you place inventory at customer sites, create customer consignment warehouses on the Warehouses form with both Consignment and Customer flags set. Ship inventory to customer consignment locations using the Customer Shipments form with Consignment Order type—this records the transfer without recognizing revenue. Configure customer consumption reporting through the Customer Consignment Usage form (CustConsignUsage IDO). When customers report usage, the system generates invoices based on the sales contract terms. Set up periodic reconciliation schedules on the Consignment Reconciliation form to verify physical stock matches system records.

Create customer consignment warehouses with Consignment and Customer flags enabled
Ship to customer consignment locations using Consignment Order type without revenue recognition
Process customer usage reports on Customer Consignment Usage form to generate invoices
Schedule periodic reconciliation on Consignment Reconciliation form for stock verification

Frequently Asked Questions

How does consignment inventory affect SyteLine financial reporting?

Vendor consignment inventory appears on the Consignment Inventory Report but does not appear on your balance sheet since you do not own it until consumption. Only consumed quantities create AP liability and inventory cost entries. For customer consignment, shipped inventory remains on your balance sheet in the customer consignment warehouse until customer consumption triggers revenue recognition. This separation is critical for SOX compliance and typically affects 5-15% of total inventory value.

Can SyteLine automatically trigger consignment replenishment from vendors?

Yes, configure min-max planning on consignment warehouse items with the planning method set to Min-Max. When consignment stock falls below the minimum due to consumption, SyteLine generates a planned consignment replenishment order. Convert these to consignment POs using the Consignment PO Conversion form. Most vendor consignment agreements include 2-5 day replenishment lead times with automatic VMI triggers when stock drops below 1-2 weeks of consumption.

How do I handle consignment inventory returns to vendors in SyteLine?

Process consignment returns using the Consignment Return form under Inventory > Consignment. This form removes inventory from the consignment warehouse and creates a return shipment to the vendor without AP credit (since no payment was made). For damaged or expired consignment stock, use the Consignment Scrap form to write off units—depending on contract terms, scrap may or may not generate vendor credit. Most contracts allow 1-3% annual scrap allowance before chargeback applies.

Key Takeaways

1Set Up Vendor Consignment Warehouses and Items: Create a dedicated consignment warehouse on the Warehouses form (Whses IDO) with the Consignment flag enabled. This warehouse tracks vendor-owned inventory separately from your owned stock for clear ownership distinction.
2Process Consignment Receipts and Consumption: Receive vendor consignment stock using the Consignment Receipt form under Inventory > Consignment. Unlike standard PO receipts, consignment receipts do not create AP liability—the inventory is recorded at the consignment warehouse without financial impact.
3Configure Customer Consignment and Usage Reporting: For outbound consignment where you place inventory at customer sites, create customer consignment warehouses on the Warehouses form with both Consignment and Customer flags set. Ship inventory to customer consignment locations using the Customer Shipments form with Consignment Order type—this records the transfer without recognizing revenue.

Considering consignment inventory for your supply chain? Netray can design and implement SyteLine consignment workflows for both vendor-managed and customer-facing scenarios.

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