It is typical for goods of type K - Consignement goods that supplier retains ownership (remains title holder) till the goods are sold off. That is why records of such goods are not kept in stock record accounts, but you can view and monitor balance of received and sold stock of consignment goods on off-balance-sheet accounts. Because goods received on consignement are sold together with regular stock, it is received at the company's warehouse where warehouse card and current item stock reports can be genereated.
The liability to consignement supplier is recorded when the goods are sold.
1. Receiving on Consignment
Use an internal document type for example a predefined docuiment type 170 for goods received on consignment.
Then create new item IDs. In such an event it is required that you select the item of the consignement type - K (e.g. predefined type 100).
Because the document in question is of the internal type, it does not appear in tax records. It is used so that you can adequately record receiving, and not liabilities.
Use the automatic posting of material consumption function to post to off-balance-sheet accounts.
2. Consignment Sales
Consignement goods are usually sold together with goods for resale, etc. That is why you can monitor issuance using the same document type as for issuing goods for the purpose of reselling. Use a predefined document type 300.
You can also use automatic posting of material consumption to post profit from consignment goods sales. The profit is represented only by the amount of gross margin. The purchase value of goods received on consignement represents liablitity to the consignee.
The off-balance-sheet accounts are relieved using automatic posting of material consumption.
3. Consignment Report
Periodically, you have to nofify the consignee on consignment goods sold (e.g. on a weekly, monthly basis, by decades).
Use the Create Consignment Report function to collect the issues by date and IDs of document types.
A collective invoice is created using the selected document type. There is a predefined document type KO0 - Collective issue for archiving which is marked as record only. It cannot be used in automatic posting and does not appear in tax records. Use it only to write off consignment and notify consignee on actual quantity and value of the goods sold.
4. Supplier's Invoice
Based on sales notifications (consignment report), you are invoiced by the consignee. You can enter a collective invoice which in turn does not affect stock but it does increase liabilities to the consignee. To create a collective invoice, use a predefined document type 151. Simply click the Add button to create the invoice from automatically created collective invoice - for more information see collective receiving.
Now post payable for VAT charged from consignee's invoice to the account already used in sale (by default: 2420) because you already posted purchase value of consignment in automatic posting of invoices issued. Post the entire amount of the invoice including VAT to supplier payables (by default: 242). Both are executed using the automatic posting of invoices received.
The document appears in tax records. From it you can create an invoice for consignee liabilities. It is used in outstanding items overview as well as in document for posting supplier's payables.
5. Available Stock of Consignment Goods
To view it, generate a warehouse card report or the currently available stock.
To get a more detailed analysis of stock movements in specific accounting period, use the material movements report. The latter shows initial status of consignment goods stock, receiving and issuance and inventory at the close of the period, evaluated according to the valuation process.
It is mandatory to specify supply date and not invoice date!
To monitor consignment goods movements, you have to check the internal receiving and invoicing document types. Then select item type K - 100 and the appropriate report type. Select document type of internal receiving for consignee and document type of issue. Use a predefined report template "Consignment sales".
6. Gross Margin Analysis
Use gross margin analysis to monitor success of consignment for item type K - Consignment in the selected sales document types.
For a general description of functions see:
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