Mastering Landed Cost: Early Invoicing and Recognition with Goods-In-Transit and Delivery Control

Managing international shipments is more than simply tracking containers, it demands financial visibility and ownership from the moment goods leave the vendor. Dynamics 365 Finance & Operations GIT functionality enables organizations to recognize costs early in the shipping journey, monitor in-transit inventory, and take financial control even before goods reach the warehouse.

At Dynamics Stream, we help organizations implement Goods-in-Transit process workflows that enhance landed cost accuracy, improve supply chain decisions, and strengthen financial transparency across global operations.

Understanding the Goods-in-Transit Process

The Goods-in-Transit process ensures that costs are captured as soon as goods leave the supplier, rather than waiting for physical receipt. By using a dedicated GIT warehouse setup, organizations can record costs at the start of a voyage. At the same time, confirmed delivery dates allow in-transit quantities to feed master planning even though the items remain unavailable for physical issue.

This approach not only improves landed cost management but also provides visibility into financial ownership, enabling better decision-making throughout the shipment lifecycle.

If your organization has not yet configured foundational elements such as cost type codes, journey templates, shipping companies, and voyage statuses, we recommend reviewing Part 1 of our series on Goods-in-Transit process and landed cost operations.

GIT Process Flow

The inbound purchase order receipt with Goods-in-Transit process follows a structured workflow that links shipment stages to financial recognition. The process flow moves from voyage creation, purchase invoice posting, goods receipt, handling under/over-delivery, and finally, actual cost allocation.

Steps in the GIT Process:

1. Triggering Goods-in-Transit: The Goods-in-Transit process is activated when a purchase order invoice is posted for a voyage enabled for goods-in-transit.

2. Receiving Goods in GIT Warehouse: Goods are received in the GIT warehouse setup via “goods-in-transit orders” before reaching the destination warehouse. This step marks financial ownership of the goods, even though they haven’t physically arrived.

3. Handling Under-Delivery or Over-Delivery: If there’s a difference between the original ordered quantity and the received quantity, the remaining quantity is placed in an under-delivery warehouse.

4. Organizations can either create a purchase order with negative quantity to adjust for vendor short-shipment, or

5. Post a movement journal to account for expense or loss due to internal damage, theft, or other discrepancies.

Mandatory Setups for Goods-in-Transit

For the Goods-in-Transit process to function correctly in the Landed Cost module of Dynamics 365 Finance & Operations GIT, several configurations are required:

1. Landed Cost Warehouses

Two specialized warehouses must be set up:

1. Goods-in-Transit (GIT) Warehouse – for capturing costs during transit.

2. Under-Delivery Warehouse – for holding items where actual receipt differs from the ordered quantity.

Setup Steps: Navigate to Inventory Management ➜ Setup ➜ Inventory Breakdown ➜ Warehouses. Create the two warehouses (GIT and Under-Delivery). Ensure the “Default” receipt location is specified for both warehouses. This ensures smooth processing of Goods-in-Transit process orders.

2. Default Issue/Receipt Location

If the organization uses inventory dimensions such as Location, the default destination for the GIT and Under-Delivery warehouses must specify a default issue/receipt location.

Navigate to Inventory Management ➜ Setup ➜ Inventory Breakdown ➜ Warehouses. Set the Default receipt location field for both warehouses. These setups ensure that financial recognition, inventory tracking, and master planning are aligned even while goods remain in transit.

Benefits of Early Invoicing and GIT in Dynamics 365

Implementing a Goods-in-Transit process in Dynamics 365 Finance & Operations GIT delivers multiple strategic benefits:

1. Enhanced Landed Cost Management: By capturing costs at the start of the voyage, organizations can calculate landed cost more precisely, avoiding surprises upon receipt.

2. Financial Transparency: Early invoicing and GIT warehouse setup provide clear financial ownership, enabling better accounting and reporting practices.

3. Improved Supply Chain Planning: Even though goods have not physically arrived, confirmed delivery dates and in-transit quantities can feed master planning for production and procurement.

4. Risk Mitigation: Handling under- or over-delivery proactively helps organizations manage shortages, damages, or theft, reducing operational risk.

5. Operational Efficiency: Automating the Goods-in-Transit process reduces manual interventions, ensures compliance, and accelerates accounting close cycles.

Why Dynamics Stream

At Dynamics Stream, we specialize in implementing Dynamics 365 Finance & Operations GIT solutions that optimize global supply chains and financial operations. Our team helps organizations configure landed cost warehouses, Goods-in-Transit process workflows, voyage tracking and journey templates, and early invoicing and cost recognition.

By leveraging these functionalities, businesses can gain visibility into in-transit inventory, improve financial accuracy, and strengthen supply chain decisions.

Conclusion

The Goods-in-Transit process in Dynamics 365 Finance & Operations GIT empowers organizations to take financial ownership from the moment goods leave the vendor, ensuring landed cost management, supply chain visibility, and operational efficiency.

With proper GIT warehouse setup, default receipt locations, and voyage tracking, companies can recognize costs early, manage discrepancies proactively, and make data-driven supply chain decisions.

For organizations looking to streamline global shipments and improve financial visibility, implementing a Goods-in-Transit process with Dynamics 365 is a critical step toward modernized supply chain operations.

At Dynamics Stream, we guide you through every step, ensuring your business maximizes the benefits of early invoicing, cost recognition, and in-transit inventory control.