Setting up your MYOB software to track consignment stock usually requires assistance from an accounting advisor. The example we'll use is a company which distributes stock to many stores. A number of stores refuse to purchase the stock outright, but will gladly sell it on a consignment basis.
This article is provided for guidance only - it might not be suitable for your business requirements. If you need clarification, check with your accounting advisor or post your question below.
What is consignment stock?
Consignment stock, by definition, is a marketing arrangement whereby physical control of merchandise but not title, is transferred from one business (the Consignor) to another (the Consignee). The title to the goods remains that of the consignor until such a time as the goods are sold by the consignee. For this reason, consignment stock is typically shown as an asset in the consignor's books until the consignee sells the goods. At this point, a sale occurs and the goods pass title.
Setting up
You'll need to create an asset account to track the value of your consignment stock (Accounts > Accounts List > Asset tab > New).
Here's an example:
Each line of inventory on consignment will require its own item number. It's a good idea to use the same item number as the existing item, but preceed it with the letter "C" to identify it as consignment stock.
To create items, go to Inventory > Item List > New.
Select the options I Sell This Item and I Inventory This Item. For the Asset Account for Item Inventory, select the asset account created above.
Here's an example:
Move stock from trading stock to consignment stock
This step uses the Build Items function to move inventory quantities and vlaues from your trading stock to become consignment stock (Invemtory > Build Items).
Select the trading stock item and enter a negative quantity for the quantity being transferred. Then select the matching consignment stock item and enter the same quantity as a positive number. Also enter the same Unit Cost as the first stock item.
Here's an example:
Sell the consignment stock
When the consignee sells the consignment stock, you need to create a sales invoice containing the untis of stock sold.
Here's an example:
Settle the invoice as usual using Receive Payments.
Keeping track of consignment stock
To help you keep track of the stock sent to a consignee, you can create a quote for those goods. Then when the consignee sells an item, you can modify the quote to remove that item from your records.
If the consignee returns stock
Complete a Build Items transaction (Invemtory > Build Items) to move the stock and its value from consignment stock back to trading stock.
Here's an example:
Please feel free to comment below with any queries you may have on the topic. We have a fabulous group of partners and customers on this forum, who would be happy to provide further guidance on the topic.
