Ways to deal with vendor consignment

mart1n0

I want to set up a vendor consignment.
Basically most of the physical stock would actually be a vendor consignment.

The things we should be able to do are:

* At the and of each day let the vendor know what we consumed so he can invoice us.
* Let the vendor know what is returned to the consignment each day so he can credit (memo) us.
* When making orders for our customer be able to see what we have in this consignment so we can pick the lot numbered items from it.
* Be able to receive goods into this consignment so we can see what is in our physical stock.

Any idea what different approaches there are to start looking at this?

Dave_Cintron

Create a location (really a virtual location) and use that for all of their transactions.

DenSter

That doesn't really work for true Vendor consignment, because when you keep stock on inventory it is part of your assets, which in a consignment situation is not the case.

kine

DenSter wrote:

That doesn't really work for true Vendor consignment, because when you keep stock on inventory it is part of your assets, which in a consignment situation is not the case.

In this situation you need to have them on the stock but with 0 cost. After you sell it and the Vendor send you the invoice, you need to apply this invoice to the sold items...

ayhan06

for correct reporting of cogs:
1. purchase items into your real locations.
2. create one virtual location to sell items. (until the end of day, you will have negative inventory as number of sold items on this virtaul location)
3. At the end of day, transfer sold quantity of items from real location to your selling location (invenory will increase to zero.)
4. Apply purhase invoice to transfer orders.

austin

Hi ,

Could u explain some more about this line
"

4. Apply purhase invoice to transfer orders. "

How can we apply purchase invoice to transfer orders.

thanks and regards

matttrax

I'm actually developing a Consignment add-on for my company right now.

It's built directly on top of the Purchasing module. The way it works is that POs are created (usually at $0 cost, but it that can be setup on a vendor by vendor basis.) When that item is sold out or returned a separate purchase invoice is created using item charges to tie the cost back to the original PO.

Consignment inventory is kept separate from regular inventory (although items are still sold out, and allocated in the case of item tracking the same way). This way you can create reports easily like aged inventory, current value, etc.

If you'd like some more information just let me know. I'd love to throw some ideas around. Maybe we can both benefit. I can't give you code or anything because we are debating on selling it as an add-on, but maybe you could be a beta tester or something .

ayhan06

austin wrote:

Hi ,

Could u explain some more about this line
"

4. Apply purhase invoice to transfer orders. "

How can we apply purchase invoice to transfer orders.

thanks and regards

"4. Apply purhase invoice to transfer orders. " means that you must apply vendor invoice to transfer receipts by item charges function of purchase invoice window.

samantha73

Reviving an old post..
Can I confirm that there is no direct way of allocating purchase invoice charge item to a sales shipment? So the only option is to sell consignment stock from a different location (allowing negative stock) and then create a transfer order once sold. Allocate vendor charge item to the transfer order

Fiddi

have look at this:https://olofsimren.com/consignment-inventory/
The other point is that you are of course able to post a purchase invoice charge towards a Sales Shipment Line.

KTA8

samantha73 wrote: »

Reviving an old post..
Can I confirm that there is no direct way of allocating purchase invoice charge item to a sales shipment? So the only option is to sell consignment stock from a different location (allowing negative stock) and then create a transfer order once sold. Allocate vendor charge item to the transfer order

You can make purchase charge over sales shipments. Another topic it's how to deal with consignment itself

samantha73

I think the problem is Purchase Invoice Item Charges do not create GL entries and only shown in item ledger Non-Inventoriable Costs

Fiddi

Costs you want to apply to a Sales Shipment Line are specific to this specific shipment, which means in normal cases freight charges, which apply to the order, but not to the inventory.
I think you should check my link above from Olof Simren, who has simple idea how to handle consignments,

KTA8

samantha73 wrote: »

I think the problem is Purchase Invoice Item Charges do not create GL entries and only shown in item ledger Non-Inventoriable Costs

Costs over a sale can't go in inventory, only decrease gross profit. Because it's something that you don't have on inventory

kate1304

Hello..

Can someone explain me this

"Apply purhase invoice to transfer orders. "

How can we apply purchase invoice to transfer orders."

KTA8

kate1304 wrote: »

Hello..

Can someone explain me this

"Apply purhase invoice to transfer orders. "

How can we apply purchase invoice to transfer orders."

There are several types of documents that can be linked on item charges, on of them are transfer orders.