How to record consignment sales
by Intuit• Updated 1 month ago
If you sell items on consignment, you can track and generate a report that shows consignment sales you have made and how much you have paid out to consignors.
There are four basic steps to this procedure:
- Set up consignors as suppliers and classes.
- Set up consignment income accounts and items.
- Record consignment sales and payouts.
- Create consignment reports.
The following sections will guide you through the steps needed to complete this process.
Tip: Don't like tracking consignments manually? If you use QuickBooks Online Plus, you can use the built-in inventory feature to make it easier to track consignment sales. |
1. Set up consignors as suppliers and classes
Before you can set up consignors as suppliers and classes, you should make sure you have turned on the Class tracking feature. Follow the steps in the following section to turn the feature on, then enter the consignors as suppliers, and assign a class to each consignor for reporting purposes.
Turn on Class tracking
To turn the Class tracking feature on:
- Go to Settings ⚙.
- Select Account and settings.
- Select Advanced.
- In the Categories section, select Edit ✎ to open the fields.
- Select Track classes.
- Select Save, then select Done.
Class tracking is enabled. The next step is to set up your consignors as suppliers.
Enter consignors as suppliers
To enter your consignors as suppliers, perform the following steps for each of your consignment suppliers:
- Go to Expenses and select Suppliers (Take me there).
- Select New supplier.
- Use the fields in the Supplier Information dialog to enter the consignor's information.
- Select Save.
Repeat these steps until all consignment suppliers are set up.
The next step is to set up your consignors by Class.
Set up consignors by Class
You can assign each of your consignors to a Class for reporting purposes.
- Go to Settings ⚙.
- Under Lists, select All lists.
- Select the Classes item to open the Classes page.
- Select New.
- Enter the consignor's Name in the Class dialog.
- Select Save.
Repeat these steps for each of your consignors to set up reporting for your consignors. The next step is to set up the accounts and items that will let you track consignment sales.
2. Set up consignment income accounts
Once the consignors are set up, you can create two accounts to help track consignment sales and payouts:
- Go to Settings ⚙ and select Chart of accounts.
- Select New.
- In the Account dialog, select Revenue from the Account Type dropdown list.
- From the Detail Type dropdown list, select Sales of Product Revenue.
- In the Name field, enter Consignment Sales.
- Select Save and Close. You are returned to the Chart of Accounts.
- Select New.
- In the Account dialog, select Revenue from the Account Type dropdown list.
- From the Detail Type dropdown list, select Sales of Product Revenue.
- Enter Consignment Payouts in the Name field.
- Select the Is sub-account checkbox and select the Consignment Sales income account you just set up.
- Select Save and Close.
The accounts are set up. The next step is to create a Sales item for consignment sales.
Set up Consignment Sales item
Now that you have your accounts set up you are ready to set up the Consignment Sales item.
- Go to Settings ⚙.
- Under Lists, select Products and services.
- To edit an existing Product/Service:
- From the Action column of the Product/Service you want to edit, select Edit.
- In the Income account dropdown list, select Consignment Sales.
- Select Save and close.
- To create a new Product/Service:
- Select New.
- From the Product/Service information panel, select the appropriate option.
- Enter all the necessary information.
- From the Income account dropdown list, select Consignment Sales.
- Select Save and close.
The Consignment Sales item is set up, and you are ready to record consignment sales and payouts.
3. Record consignment sales and payouts
You are now set up to sell consignment items and pay consignors.
As you create invoices or sales receipts and record payouts, remember the following:
- Sales: When you create an Invoice or Sales receipt, be sure to use the Consignment item for the sale, and to select the appropriate consignor in the Class field.
- Payouts: When you record a payment Cheque to a consignor, be sure that the Consignment Payout account is used to record the payout amount, and that the consignor's Class is listed on the same line as the payout account.
4. Create a consignment report
After you have set up consignors and properly recorded sales and payouts, you can create and save a customised report showing a breakdown of your consignment sales and payouts.
To create a custom Consignment Sales/Payout report:
- Go to Reports (Take me there).
- In the Business overview section, select the Profit and Loss by Class report to open it.
- In the Income section, locate the Consignment Income item and select the amount in the Total column for it.
- In the Transaction Report, select Customise.
- Set the Report period date range to include all the sales and payouts you want to report on.
- In the Rows/Columns section, select Class from the Group by dropdown list.
- Select Run report.
The report is re-run with your settings. - Select Save customisation.
- In the Custom report name field, enter Consignment Sales/Payout report.
- Select Save.
This report is now available at any time from the Custom reports tab, available from the Reports (Take me there) page.
The report groups sales, payouts, and ending income by each of the consignors, as well as the total income by all. Non-consignment sales are grouped under the Not Specified class.
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