Setup a Reserve Warehouse

Owned by Alan Gilchrist, created
Last updated: Mar 22, 2023
2 min read

This article explains the basic steps of setting up a new warehouse where you want that warehouse to be used for customer reserves.

What is a Reserve Warehouse?

This is when you sell goods to your customers but you continue to look after the goods in the warehouse. These are paid reserves, in order to move the goods from your ownership to the customer a Type R order needs to be initiated because this type of order only charges for the goods and stores the VAT element for use later when the customer removes them from stock for the duty and vat invoice.

You should never have paid customer reserves within your trading account.

Reserve Process

After you have the warehouse setup you can then sell the items to your customer

  1. Make a sale using the Type R order if you wish the stock to remain underbond; or a duty paid order if you wish to pay the duty, however duty paid orders will have to be manually landed into the reserve account. The Type R order will instruct the warehouse to transfer the stock underbond from your trading account to your reserve customer account and it should auto land itself in the new account.

  2. Each rotation stock in the reserve account has a reserve customer code associated with it, we always suggest you keep with your customers own account code as the reserve.

  3. The stock remains in the location until it is requested by the customer, however you can charge storage on this stock which is charged in advance each year or pro-rata throughout the year, this is charged per single item.

  4. Your customer can offer this stock for trading, making it available to you to sell it on their behalf.

  5. Orders leaving the warehouse if they are duty paid and the stock requires duty to be paid will request the duty and vat elements only from your customer (they paid for the product when they purchased it at the beginning in the Type R order).

Orders leaving a reserve warehouse will require a rotation number for each product line due to the fact that each line is specifically owned by a reserve customer.

Transferring Stock From Paid Reserves

In Order to transfer stock out of paid reserves you will have to use a Sales Order set to UnderBond Type “T” for transfer. Unlike a regular stock transfer this will create a Purchase Order upon completion of the Sales Order allowing you to input a new customer, change stock values and select a location for the stock. When you have then completed the Purchase Order the Paid Reserves stock will then be re-landed to your selected location as regular stock under a non-reserves customer.

Instructions

  1. Create a new warehouse group -

  2. Create a new warehouse -

  3. Update the customer settings

 

It is important to setup the warehouse group and warehouse correctly in order to ensure that the stock is accounted for correctly.

The warehouse must replicate the setup at their end in order for this to be successful.

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