E-commerce · Logistics
In-transit inventory and purchase commitments
Published · Reviewed by The Diligence Standard Team · Updated
The buyer may inherit deposits, open purchase orders, title risk and inventory moving through multiple parties and jurisdictions.
Records to reconcile
- Open PO and deposit schedule
- Incoterms, title and insurance records
- Shipment tracking and receiving status
Warning signal
Cash commitments or title to goods are unclear at the measurement date.
Transaction impact
Working capital, loss exposure and closing inventory can be misstated.
Response
Define ownership and included commitments shipment by shipment and reconcile after receipt.