# Domestic trade

Domestic trade covers business that involves no customs declaration: domestic own-account trade, domestic agency (procurement or sales agency), domestic subcontracted processing and contract processing. Tranexio handles it with the same contract, order and finance models as import and export, sharing counterparties, inventory and treasury for truly integrated trade.

## Key points

- **Contracts and orders kept apart**：Framework contracts govern long-term terms, while orders carry the four flows of money, invoices, goods and price. One contract can split into many orders, and fulfilment rolls up from orders to the contract.
- **Purchase–sales matching**：Purchase and sales orders can be paired one-to-one, many-to-one or one-to-many, with order profit and loss calculated in real time from the pairings.
- **Prepayments and repeated fixing**：Prepayments, final quantity adjustments, multiple price fixings and multiple physical–futures matches are supported; costs can be allocated to orders, and order P&L includes the futures effect.
- **Traceable title**：Inventory is shown as book stock, goods in transit and warehouse receipts; transfers of title are registered and evidenced, so you can see who held which lot and when.
- **Two kinds of processing, kept distinct**：Subcontracted and contract processing are distinguished by who owns the raw materials: fees in the first go to inventory cost, while the second recognises processing service revenue net.

## The problem

Domestic trade looks simple, but prepayments, final quantity adjustments, repeated price fixing, agency buying and selling, and subcontracted processing are often mixed together. Running it on spreadsheets leads to unclear title, inaccurate margins and agency business inflating gross revenue.

## What the platform does

| Preset | Commercial model | Regulatory model | Key points |
|---|---|---|---|
| Domestic own-account trade | Own-account | General domestic business | Revenue recognised gross, invoiced in full |
| Domestic agency (procurement or sales agency) | Agency | General domestic business | Agency fee recognised net; goods payments passed through |
| Domestic subcontracted processing | Subcontracted processing | Domestic subcontracted processing | BOM and unit consumption management; processing fees settled into cost |
| Domestic contract processing | Contract processing | Domestic subcontracted processing | Materials stay out of your inventory; processing service revenue recognised |

Main workflow: contract → order → prepayment or receipt → price fixing (if any) → dispatch or arrival → final quantity settlement → invoice → journal entries. Confirming a business document generates an accounting event that is pushed to finance; see [Finance-business integration](https://tranexio.com/en/capabilities/finance-integration/).

## Key controls

- Each order has a single lifecycle status, with fulfilment shown consistently across money, invoices, goods and price.
- Credit limits are consumed and released in real time at order, dispatch and payment.
- Compliance screening runs at four submission points: contract, order, shipment and payment.
- Subcontracted processing and finished-goods sales must be split into separate orders so the two processing treatments never mix.

## FAQ

### How is revenue recognised for domestic agency business?

On a net basis. Once the commercial model is set to agency, the system recognises only the agency fee as revenue and treats goods payments as pass-through, outside your inventory and sales. Invoices and journal entries follow this treatment automatically, avoiding inflated gross revenue.

### How do we tell subcontracted processing from contract processing?

By who owns the raw materials, not by who does the processing. If you own the materials and the other party only performs the work, it is subcontracted processing and the fee is added to inventory cost. If the principal owns the materials and you only perform the work, it is contract processing and neither materials nor finished goods enter your inventory.

### Can domestic trade use price fixing and hedging too?

Yes. Domestic trade shares the pricing order and hedging model with import and export. Once a price is fixed, a hedge recommendation is produced, and futures gains and losses can be allocated to order P&L monthly for integrated physical–futures accounting.

### Can domestic and international trade be managed in one system?

Yes, and that is exactly what integrated domestic and international trade means. Domestic trade and import and export share counterparty records, inventory, credit and treasury; part of a lot can be sold at home and part exported, with consistent order P&L and journal entries.

---
Source：https://tranexio.com/en/trade-models/domestic-trade/ · Updated 2026-10-06 · © 上海赛淘数据技术有限公司 / Shanghai Saitao Datatech Co., Ltd