Goods in transit: shipped but not arrived, arrived but not booked

At close of business on 31 December a loaded truck is parked at the factory gate, not yet unloaded. A container is marked "shipped" on the dispatch note but is still on the road. Do these goods belong in year-end stock? Without an agreement made in advance, the same goods may be counted twice, or missed on both sides.

When ownership and risk pass depends on the contract terms (FOB, DAP and other trade terms differ), and the accounting treatment is for your finance team and lawyer to confirm. This article covers how the warehouse records goods in transit so that the question of which side they belong to rests on evidence.

First, tell six states apart

Inbound:

• Shipped, not arrived: the supplier has dispatched the goods and they are still on the road.
• Arrived, not unloaded: the truck or container is at the gate or in the yard, not yet unloaded or checked.
• In the warehouse, not booked: unloaded and counted, but the receipt is not yet entered.
• Booked, not put away: the receipt is entered, but the goods are still in the receiving area.

Outbound:

• Document raised, goods still here: the issue note is out, but the goods are still in the warehouse.
• Goods gone, document not raised: the goods have left and the paper has not been entered.

For each state, settle before the count whether the physical stock includes it and whether the books include it.

One principle: physical by location, books by document, both at the same moment

• The count covers what is physically inside your warehouse at the cut-off.
• Book stock is what has been entered by the cut-off.
• The gap between the two consists of reconciling items, and each needs a document and an explanation.

On this principle, goods shipped but not arrived are not in the warehouse and are not counted. Goods arrived but not unloaded are normally treated as not yet received, unless checking was completed. Goods in the warehouse but not booked, and goods with an issue note raised that are still on the shelf, are reconciling items. How each is booked is for finance to decide. The warehouse's part is to record the facts completely.

How to build the in-transit list

Keep one in-transit list in the hands of one named person, usually from logistics or purchasing. It shows the purchase order number, invoice number, supplier, item, quantity, dispatch date, vehicle or container number, expected arrival, the status at cut-off and the evidence (transport documents, gate log, photos). Update it weekly, and daily in the last week before the cut-off.

Around the cut-off, have the gatekeeper log the vehicles on site and photograph the gate, so that "had it arrived or not" can be checked.

An invented example

Suppose book stock of an item at the cut-off is 10,000 pieces and the count finds 9,780, a gap of 220. You trace it:

• 350 pieces were issued before the cut-off, but the issue note was entered the next day. The books still include them and the shelf does not, so the count is 350 lower than the books.
• 150 pieces were unloaded and counted in before the cut-off, but the receipt was entered the next day. They are on the shelf and not yet in the books, so the count is 150 higher.
• The remaining 20 pieces cannot be explained by documents. Only this is a real difference that needs further tracing.

The arithmetic: 10,000 − 350 + 150 = 9,800, which is 20 more than the count of 9,780. (Figures are illustrative.) Without this breakdown you see only "220 short".

Avoiding duplication and omission

• Each document appears once on the in-transit list, with a note of which side it belongs to.
• Clear the list item by item in the following month, check quantities on arrival and chase anything that has not arrived when expected.
• Show goods that have been in transit too long, for example over 60 days (you decide the number), separately with the reason. In the figures sent to head office, keep goods in transit apart from stock on hand.

In short

For goods in transit, the key is to keep the states apart and keep the evidence. In year-end and quarterly counts, UzWarehouse lists these items one by one and matches them with documents. The inbound check service can also record the quantity and condition of arriving goods on the spot.