Proper transaction for raw material, shipped, processed off-premise, then shipped back for assembly

Question

Hi everyone, 
 Could you share your experience on how to deal with a flow of goods like below? 
 
 Raw material is shipped to a vendor 
 the vendor processes it, charges service fee, which becomes a finished goods, then they ship it back 
 the returned finished good is then used in production of other finished good in BOM 
 
 #3 is simple but I am struggling to come up with a proper transaction in Sage 100 for #1 and #2. What are your experience?? 
 
 Ken

BigLouie · Accepted Answer

I would use a Work Order and a Purchase Order for the vendor process which would be assigned to the Work Order. Production Entry to create finished goods which releases the raw material from inventory and rolls up the fees into the finished goods that are used in another BOM.

btmlinesoft · Answer

You optimal solution would be as BigLouie suggests - If you have work order (or as it is known now Production Management) create a outside process step, issue a purchase order (assign the line to the WO and step number) for the outside process. When the item is returned, process a receipt of goods/invoice. Cost will be assigned to the WO. If you don't have WO/PM, then create an outside process inventory item (inventory valuation of lot or serial number). Issue the PO. Receive it back in assigning the the lot/serial number. When you process the BOM, include that process item code and use the lot/serial item.

Kevin M · Answer

Another idea is to transfer the items being worked on to a separate warehouse, and do a BoM Production entry when you receive them back to add in the extra costs (GL clearing) and move them back to the normal warehouse code. AP invoice against the clearing account and you're done. 
 Edit: 
 You probably won't want to use this strategy if you have high volumes with multiple service providers because reconciling the clearing account would get messy.

Sage 100

Proper transaction for raw material, shipped, processed off-premise, then shipped back for assembly

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