Inventory: Receive Finished Product (Bottles/Cases) into Dx5 Inventory (Read Time: 6 mins)

Receiving Finished Product (bottled/cased goods) into DISTILL x 5 is typically done for one of these reasons:

• The liquid and bottles were produced for you by another distillery under a co-packing or similar agreement
• The liquid was distilled or processed by you and sent to another distillery for bottling, and then returned to you in bottles
• A wholesaler is returning product to you that you previously sold to them
• You have purchased bottled product, usually at wholesale, for the purpose of returning it to bond and using it as an ingredient/blender, or rebottling it (e.g. Tequila for an RTD)

In the US, regulations surrounding these transactions is complicated.

Bottled Spirit may be transferred "In-Bond" or "Tax Paid", depending on the circumstances. (See also: Fx5 Blog Post Bottled Spirits Usually Can’t Be Transferred “In-Bond”)

Wholesaler returns are legal in some circumstances (e.g. if discontinuing a product / line), while they risk a Trade Practices Violation in other circumstances (e.g. if product was sold on consignment or "with privilege of return"; the mere fact that product is slow-moving is not enough to justify a legal wholesaler return). Bottles that come from a wholesaler/distributor are always Tax Paid.

When receiving Tax Paid Finished Products, DSPs in the US have the option of returning the spirits to bond. Returns of Tax Paid spirits to bond must be for one of five allowable reasons. See Return of Tax Paid Spirits to Bond: How, When and Why (Read Time: 4 mins). Tax Paid spirits that are returned to bond are potentially subject to double taxation, which can be avoided by filing a claim with TTB.

If you are sending out Bulk Spirit and receiving packaged Finished Products back, you might also wish to review Co-Packing: Withdraw Bulk Spirit (Read Time: 2 mins).

Tax Paid Spirit that is not being returned to bond does not have to be tracked in Dx5, since these bottles do not impact your Federal Reporting. If you choose not to track Tax Paid Spirit in Dx5, you still have to keep good inventory records of the product elsewhere.

This table summarizes the various ways that bottled spirit can make its way to your Dx5 inventory, and the role that "allowable reasons" and "intent" play in determining the correct way to document your transaction:

To receive Finished Products in Dx5:

• Locate the Finished Product Size you're receiving via Inventory > Overview and click the blue arrow (chevron) to the far right to access Quick Actions.
• Select the Adjust Quantities option from the Quick Actions menu:

• On the Adjust Finished Product Quantity form, enter an Adjustment Date/Time for the transaction.
• Refer to the table above and select either "BONDED" or "TAX PAID" Tax Status for the Finished Products received, keeping in mind that Tax Paid bottles that are being returned to bond should be marked as "BONDED" Tax Status.
• If you do not see the TAX PAID Tax Status option, follow the steps in this article to create it: Inventory: Create Tax Paid Inventory (Read Time: 1 min).
  
  
• Choose the "Addition" Adjustment Type:
  
• Enter a Quantity and a Container type (Either Bottle/Can "Units" or Cases):
  
• If the "Bonded" Tax Status was selected earlier on the form, Users will be required to enter a Reason for the transaction; this is to track the transaction on appropriate Federal Reporting lines. The Reason of Received should be selected:
   
• Enter a Unit Cost (if Batch Costing is enabled); this should be the actual Unit or Bottle/Can value (example: $3.00/can).
• If you have a PDF file of your RIB/BOL paperwork from your partner and would like to include it with this receipt, use the BOL Document Upload field to attach your PDF documentation. 
• Enter an optional Note for the receipt, if desired. If you are returning to bond, this is a great place to document which of the 5 allowable reasons you are utilizing.
• Click Perform Adjustment when the form is complete. 

Note:

• Receiving BONDED Tax Status Finished Product inventory will cause the corresponding proof gallons to flow through to Federal Processing Pt II, Line 29, "Received".
• Receiving TAX PAID Tax Status Finished Product inventory will not impact Federal Reports.