Consignment stock system:
- Acquire stock at $0 cost via way of a creditor invoice with a distinct/unique Item Code (shouldn’t be an issue as consignment stock will usually be stock that isn't held by the business anyway, so the actual item code can generally be used with no issue)
- Stock will have $0 stock value, and a Qty on Hand present in the Stock Master File / Price Enquiry as a result of this initial Creditor Invoice
- Sell the stock as per normal. The only drawback to P&L is that the GP% will be 100% for each sale
- When stock 'replenishment' is required, the supplier of the consignment stock will send an invoice for the consignment stock that has been sold thus far.
- A creditor invoice will be created utilising the Cred Invoice GL Tab and using a specific Consignment stock GL account that will outline the cost of the Consignment Stock to the business. This cost will form the basis of P&L for that product, as it will show the total cost of the con stock and as the con stock is acquired at $0 with 100% GP then this GL account will be used as an offset for the P&L and the balance can be SUBTRACTED from the P&L reporting to give an accurate account of the profit margin for this good.
- New stock will be acquired through a separate Cred invoice with $0 cost again, effectively boosting the QoH again.
- The process cycle is complete at this stage and will either sell out / return existing consignment stock with no further orders or continue the cycle of consignment holdings
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