Goods in Transit
Definition
Inventory that has left the supplier but not yet reached the buyer. Which party records it depends on the shipping terms, which decide when ownership and risk pass.
Related Terms in Purchasing & Inventory
Consignment Inventory
Stock held by one party but still owned by another until it is sold. The holder records a sale only when the goods are sold on; the owner keeps the inventory on their books until then.
Vendor Management
The process of selecting, onboarding, monitoring and paying suppliers to get reliable quality, pricing and delivery. Good vendor management reduces cost and supply risk.
Procure-to-Pay (P2P)
The end-to-end process from requesting and ordering goods to receiving them and paying the supplier. Integrating these steps improves control and spots errors before money leaves the business.
Moving Average Cost
An inventory costing method that recalculates the average unit cost after each purchase, so goods are issued at the latest running average. It smooths cost fluctuations in a perpetual system.
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