We have different manufacturing companies in IFS that are individual legal entities. Companies have Intercompany relations with intersite Order flow handled with MHS messages. Ordering companies order with purchase orders at supplying companies, that sell with customer order. Companies are located on different continents. Transport is done via sea freight with transport lead times from 6 to 10 weeks.
For the finance consolidation at year end, we face an issue, that components shipped before year end, that are still in transit at year end, are missing in inventory value for the group. At time of shipment, customer order is delivered and immediately invoiced. Delivery note is sent with MHS dispatch advice. That means, Supplying company does not have the inventory value anymore. Ordering company has not yet received the purchase order. Therefore, components are not in their inventory value.
What is the correct process or setup to handle this scenario from finance perspective and still following the real logistics process?
Best answer by Kanishka Dilana
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