How to Setup and Sell Consigned Inventory

Author: support staff Reference Number: AA-02081 Created: 2013-09-27 14:12 Last Updated: 2013-09-28 14:58

0 Rating/ Voters

Create a New Inventory GL account and call it something like Spec Inv (This will be an Asset type of account)
Create a New Cost of Goods Sold GL account and call it something like Spec COGS (This will be an COGS type of account)
Create New Inventory items for all the items that you wish to keep in your stock as consignment type of items.

You will want to change the default Inventory account when adding these items to the new Spec Inv created above
You will want to change the default COGS account when adding these items to the new Spec COGS created above

Create a PO and add these newly created items to the PO with the Quantity you will be receiving into Stock on consignment and the Cost that you will be paying for them when you sell them.
Receive the PO into Stock.
Create an AP Bill for this PO using the Spec Inv account as the G/L Account

When you print your financial reports it will now show that you have X dollars worth of inventory in the new Spec Inv account. And you will show that inventory in stock for sale.

When you sell any of these new items on an Order and the invoice is posted it will show the Spec Inv account being reduced and the Spec COGS account as being increased. If you need to know how much you owe to this supplier you can use the COGS account as the balance of the items sold.
You will then create payments to pay down the AP Bill you created by this amount. The AP Bill will remain in your system as owing until it is paid in Full.
If at any given time the Supplier wants his inventory back or you decide not to carry these items you can then create a RMA and return them back to the supplier and then create a credit Bill from the RMA and use it to pay off the Bill.