Consignment Sales

thinafans

The scenario is like this. The whole consignment stock will have no impact on the GL until the goods are sold and we raise a PO for that.

When the consignment goods are in our showroom, this will be at zero cost as these are not our stock. Hence no GL impact. However, we need to put in these items in our stocklist so that the sales person can sell these consignment stocks.

Once sold, we need to raise a PO to the supplier and do the necessary receiving and invoicing. This is when the inventory cost will come in (GL impact) and at the same time, we need to recognize the sales amount as our income (GL impact).

Therefore the problem we are facing now is how to put the inventory quantity into the system without affecting the GL and also how can we create the SO whereby the costs will come in later.

Pls suggest.

ara3n

Receive the goods at zero cost (no expected cost as well).

Sell the goods.

Write a processing report that generates PO invoices for sold goods and links them to the original UN-invoiced PO. Post the PO invoice. This will invoice the Un-Invoiced PO and bring in the cost for the Original receipt.
Adjust cost will take care of the COGS.
You will be left with fully received PO and invoiced that you will need to delete.