What is consignment order in SAP TM - Transportation Management?

SAP Term: consignment order

• Component: TM

• Component Name: Transportation Management

• Description: A business document that is used to group several transportation requirements based on certain criteria, such as the same source and destination location. This document is then used to serve as a basis for the communication between the business partners involved, such as the ordering party, carrier, and logistics service provider. Furthermore, it serves as a basis for subcontracting, planning, and settlement.

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• Key Concepts: 
  A consignment order in SAP Transportation Management (TM) is a type of sales order that allows a customer to purchase goods from a vendor without having to pay for them upfront. The vendor retains ownership of the goods until they are delivered to the customer, at which point the customer pays for them. This type of order is often used when the customer does not have the funds to pay for the goods upfront, or when the vendor does not want to take on the risk of non-payment. 
  
  How to use it: 
  In SAP TM, consignment orders are created in the same way as regular sales orders. The main difference is that instead of selecting “Payment” as the payment method, you select “Consignment”. This will indicate that the vendor will retain ownership of the goods until they are delivered to the customer. Once the goods are delivered, the customer will then pay for them. 
  
  Tips & Tricks: 
  When creating a consignment order in SAP TM, it is important to ensure that all relevant information is included in the order. This includes details such as delivery address, payment terms, and any special instructions related to the delivery. Additionally, it is important to ensure that all relevant documents such as invoices and packing slips are included with the order. 
  
  Related Information: 
  Consignment orders are just one type of sales order available in SAP TM. Other types of orders include regular sales orders, return orders, and credit memos. Additionally, SAP TM also offers a variety of other features such as freight cost calculation and route optimization.