V9 - Consignment inventory

In SOS Inventory, the handling of consignment inventory—goods transferred by the owner to another party, typically an agent hired to sell the goods on the owner’s behalf—depends on whether you are the consignor or the consignee.

Differences between a consignor and a consignee:

• Consignor
  • Supplies items for sale to the consignee.
  • Owns the items.
     
• Consignee
  • Lists items for sale provided by the consignor.
  • Sells the items.
  • Pays the consignor a fee after items are sold.

For the consignee, consignment inventory requires creating the correct accounts in QuickBooks Online and linking consignment items to the correct accounts. Sales inventory assets should be in a separate account from your consignment inventory assets. In addition to creating separate inventory asset accounts in QuickBooks Online, it is very important to assign the correct asset account to that item when it is defined in SOS. 

Consignment location setup and workflow for consignor

Used when the SOS Inventory user is the consignor.

1. Create a non-nettable location in SOS Inventory for each consignment location.
2. Move goods by creating a separate transfer transaction to each consignment location.
3. Once the goods are sold:
   • Create a shipment from the consignment location. The customer is the consignee.
   • Create an invoice from the shipment and set the price to equal what the consignee must pay you for the goods.

Consignment items are classified as inventory assets. Designating the location as non-nettable will protect consignment items from being inadvertently added to your available-for-sale quantity and sold from your location. 

Account and item setup for consignee

If the SOS Inventory user is the consignee, two different options are available for account and item setup.

Method 1

1. Create a location to store the consignor's goods.
    
2. Create items where the names are unique to the consignor's goods.
    
   infoTIP: You could create a prefix to represent the consignor's company and add that to the names of the items from that consignor.
3. Receive the stock into inventory at zero value.
    
4. Once sold:
   1. Create a sales receipt or sales order.
      1. The customer on the transaction is your customer who buys the item.
      2. The price is how much you are selling it for to the customer.
   2. Create a shipment from the sales order or sales receipt.
   3. If you used a sales order, create an invoice from the sales order.
   4. Add either:
      1. An item receipt in SOS Inventory for an expense item Consignment fee.
         1. The vendor on the transaction is the consignor.
         2. The amount is the amount you now owe the consignor for selling their merchandise.
      2. Add a bill in QuickBooks Online.  
         1. The item on the bill can be either of the following:
            1. The expense item Consignment fee.
            2. The sold item itself. Since the sold item is non-inventory in QuickBooks Online, adding it to a bill applies it to the expense account assigned to it.

Method 2 (typically used for high-dollar items)

1. Have two versions of the item (e.g., Receiver and Receiver – consignment) in SOS Inventory.
    
2. Receive the consignment stock into inventory at zero value (Receiver – consignment).
    
3. Once sold:
   1. Adjust the consignment item (Receiver – consignment) to remove it from inventory.
   2. Receive the alternate item (Receiver) at the cost you must pay the consignor.
   3. Create a sales receipt or sales order.
      1. The customer on the transaction is your customer who buys the item.
      2. The price is how much you are selling it for to the customer.
   4. Create a shipment from the sales order or sales receipt.
   5. If you used a sales order, create an invoice from the sales order.