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For consignee, the main advantage is probably in minimizing the risks: the consignee does not need to pay for goods until the goods are sold and can return the unsold goods at no cost.
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Enabling the functionality
To enable this functionality, select the Issue Goods for Consignment Sales option on the Administration > Settings > Sales form. Also, if you are going to use discounts in such sales, select the Enable Discounts and Markups in Consignment Sales option on the same form.
Moving
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goods to a
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consignee
To record the goods moved to the consignee location, create and post the following documents.
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For more information, refer to Invoices (Transfer to Consignment). The document generates no GL transactions (journal entries).
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If the goods intended for consignment sales are stocked at warehouse for which the Separate Inventory and Financial Documents option is selected on the Administration > Settings > Purchasing and Warehouses form, you need to create a Goods Dispatch Note. For more information, refer to Goods Dispatch Notes.
Prepayment
Prepayments (if received from consignees) can be processed as usually, by creating Cash Receipts, Bank Receipts or recording Cheques Received. Then, when the entity is billed for commission, a a report on consignment sales is received from the consignee, the prepayment can be applied to the Consignee Report or the Invoice Received (commission).
Recording the
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consignment sales
On the contract expiration, the entity creates the following documents.
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For this document, you need to select the Return from Consignee transaction type. The document registers unsold goods, transferred from the consignee back to the entity. The document is created based on the data received from the consignee. The document generates no GL transactions (journal entries). For more information, refer to Invoice Received (Return from Consignee).
Goods Receipt Note
If the unsold goods are transferred from consignee to the warehouse for which the Separate Inventory and Financial Documents option is selected on the Administration > Settings > Purchasing and Warehouses form, then you also need to create a Goods Receipt Note. For more information, refer to Goods Receipt Notes.
Consignee Report
This document contains information on the goods sold by the consignee and the commission due on these sales.
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From this document, you can generate a document that confirms the receiving of the resulting sales amount: Cheque Received, Cash Receipt, or Bank Receipt. If the commission is to be paid separately, you can generate a payment of any available type specifically for the commission: Cheque ReceivedIssued, Cash ReceiptPayment, or Bank ReceiptPayment.
The program calculates the output VAT due for the goods sold and input VAT for the commission amount to be paid by the entity. And you also can generate from Consignee Report a Tax Invoice Received for the output VAT levied on the commission and a Tax Invoice that registers the input VAT due on sold items.
For more details, refer to Consignee Reports.
Tax Invoice
This document registers the output VAT for the tax amount due on sold goods. It can be generated from the Consignee Report or created manually.
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This document registers the input VAT for the tax amount due on commission to be paid to consignee. It can be generated from the Consignee Report or created manually.
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Recording goods returns
If some goods were returned from end customers through the consignee after the sales had been recorded, commissions paid, you need to create the following documents to register the returned items.
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This document contains the list of returned items with their quantities and prices. You need to indicate that the amount will be considered as an advance payment. For details, refer to Credit Notes (Goods Return and Invoice Correction).
Goods Receipt Note
If the returned goods are transferred from consignee to the warehouse for which the Separate Inventory and Financial Documents option is selected on the Administration > Settings > Purchasing and Warehouses form, then you also need to create a Goods Dispatch Receipt Note. For more information, refer to Goods Dispatch Receipt Notes.
Tax Credit Note
This document adjusts the output VAT for the tax amount due on returned goods.
It can be generated from the Credit Note or created manually.
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You can create this document with the Customer Debt Assignment transaction type to adjust the consignee's debt for the amounts of returned goods and overpaid commission.
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Using reports for details on items in consignment
The information about the goods transferred for consignment sales is reflected in the reports in the Warehouse module.
The Balance of Transferred Inventory report lists the items transferred to other companies for consignment sales along with items transferred for subcontractor processing and temporary storage at contract warehouses.
The Balance of Transferred Inventory report
The Statement of Transferred Inventory report provides information on changes in the balances of items transferred to other companies for consignment sales along with items transferred for subcontractor processing and temporary storage at contract warehouses.
The Statement of Transferred Inventory report