Many suppliers have a business process where they cannot invoice customers until the customer confirms delivery of the product, which completes the supplier’s performance obligation. The elapsed time between shipping and delivery can be as great as 60 days. With this business process, suppliers cannot recognize revenue until the invoice has been posted, which must occur after the performance obligation. Also during the in-transit period the shipping company continues to have legal ownership of the product until it has been accepted by the receiving customer.
During this period, the value of in-transit inventory must remain on the balance sheet of the shipping company until the material is received and accepted by the customer. Invoicing and Sales Update processing must be delayed until the material is received and accepted at which time the legal ownership is transferred from the Supplier to the Customer.
An enhancement is available in the 9.2 release of JD Edwards EnterpriseOne to provide the functionality to create journal entries for In-Transit Inventory at the time of Ship Confirm (P4205). For additional information see 9.2 Enhancement - Retaining Ownership of Inventory While In Transit (Doc ID 2246772.1).