Goods that you've given to a consignment partner to sell will remain your property until they are sold. That's why all you have to do is transfer the issued goods in the stock accounts to a different stock account. If you're dealing with commercial goods, it would be appropriate to transfer posts from account 6600 - Merchandise in Own Store to account 6610 - Merchandise in Third Party's Store. On the basis of consignment reports from your partner, you'll present an invoice for the goods sold.

1. Issue to a Consignment Partner

Goods that you've issued to a consignment partner are still your property. That's why you'll record the issue of goods using a transfer document, for example predefined document type 260.

The recipient of the goods will be your consignment partner, and will appear in the Subjects register as both a customer and a warehouse - this will enable you to track your stock with a given consignment partner. Select stock tracking for the consignment partner and, of course, a suitable stock valuation method.

Using automatic posting of material consumption, you'll post the transfer of value from one warehouse to another.

2. Invoicing Goods Sold

As you've seen in the short introduction (see Material and Goods Movements and Simplifying Material Movements), there are two options for continuing the process. On the basis of your consignment partner's report, you can:

a) Use a transfer to return the goods to your main warehouse, and then issue an invoice for goods sold. The document type used to record the transfer of goods from your consignment partner's warehouse to your main warehouse will be marked as Record Only, because it will not lead to any posts.  

b) Issue an invoice for goods sold directly from your consignment partner's warehouse.

Due to the particularities of posting consignment sales, you must (regardless of which method you've selected) use a special document type, for example predefined document type 3K0. 

The easiest way to create an invoice from your consignment partner's warehouse is to use the Add Movement function to select a range of transfer slips, which you'll be unburdening, and check Not Added for this DT in the Add box.

An overview of the lines will produce information about the untransferred quantity and the actual stock in your consignment partner's warehouse. Before adding, you can also change the quantity to be invoiced for your consignment partner.

The invoice you've created for the final sale will cover the actual sale to the consignment partner.

Automatic posting of issued invoices makes it possible to post receivables from consignment sales, income, and taxes.

Using automatic posting of material consumption, you'll post reductions in the value of stock and transfers between expenses.

3. Viewing Stock at a Consignment Warehouse

You can view stock with a warehouse card or an overview of current inventory for an individual consignment partner.

  Material Movement Reports can be used for a more in-depth analysis of movements of stock in a particular accounting period. This will show the initial stock, receipts and issues in the period, and the stock at the close of the period valued by valuation price. To do this, select the document types for transfers and invoicing that you've used for consignment transactions, select your consignment partner's warehouse, and choose a desired form for the report. You can create and save a template for material movement reports of this kind.

Print out:

4. Analyzing Gross Margin

You can monitor the success of consignment transactions through a gross margin analysis for a particular consignment partner (that is, warehouse) by selecting the document type used for the final sale.