Consignment sale process for consignee

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Consignment sale process is a process where a company sends products to a counterparty so that the counterparty sells or uses them. The products are stored at the counterparty's warehouse, but the company retains the ownership of the products.
The counterparty can consume the products from that warehouse at any time. The company bills the counterparty only for the quantity of products actually consumed. If the counterparty sells the products, the company pays a sales commission for the products sold.

In this process:

The company is a consignor.
The counterparty is a consignee.
The products sent to the counterparty are consigned products.

1C:Drive supports the following steps of the consignment sale process for consignee:

Set up the consignment sale process
Receive consigned products
Record consignment sales to customer
Report consignment sales to consignor
Record payment to consignor.
Record unconsumed product return to consignor
Monitor consignment sales

Setting up consignment sale process

To set up the consignment sale process for a consignee:

Go to Settings > Sales. Then under Consignment sales, select the Accept consigned goods checkbox.

Receiving consigned products

When you receive products from a consignor, create a goods receipt and set its Operation to Receipt from a third party. For details, see Receipt from third party.

You can also print a goods received note based on the goods receipt and send it to the consignor. For details, see Printing goods receipts.

Recording consignment sales to customer

When you sell the consigned products to a customer and invoice them, create a sales invoice and set its Invoice type to Invoice. For details, see Invoice.

An accounting policy defines which products are sold first (see Inventory dispatching strategy). This can be a company's own or third party's products (in this case, consignor's products). To ensure the sales invoice contains the consignor's products, you can do the following:

In a sales invoice, on the Products tab, fill in products and click More actions > Edit ownership.
In the Inventory ownership dialog, select a product line, click Add, and in the added line, click Show all.
In the Edit ownership dialog, select ownership and click Select.
In the Inventory ownership dialog, click Apply changes.

Reporting consignment sales to consignor

After you sell the consigned products, you need to report this sale to the consignor. To do this, create an account sales to consignor document. In the document, specify the consignor and the product details including the quantity sold or used and the amount to be paid for them to the consignor. If you need to record a sales commission received, select the Commission is withheld checkbox and specify the sales commission details. For details, see Creating account sales to consignor documents.

To save time on the document data input, you can do either of the following:

Generate the document from the original goods receipt (see Receiving consigned products).
Fill the document with data from the posted sales invoices containing the consigned products. To do this, specify general details in the document, then click Select > By sale result on the Consigned goods tab.

After you post the account sales to consignor document, your company's accounts payable are increased. The sales commission (if any) is withheld from the accounts payable.

You can also record a sales commission using a separate sales invoice. For details, see Recording sales commission.

Recording payment to consignor

When you need to pay to a consignor for the consigned products that you sold or used, create a payment document: bank payment or cash voucher. Set its Operation to Payment to supplier. To save time on data input in a payment document, generate it from the original account sales to consignor document created for a consignor. For details, see:

Payment to supplier by bank payment
Payment to supplier by cash voucher

Recording unconsumed product return to consignor

If you sell or consume only some of the consigned products, you can return the remaining products to the consignor. In this case, create a goods issue and set its Operation to Return to a third party. For details, see Return to third party.

Monitoring consignment sales

To monitor consignment sales as a consignee, use the following reports:

Report	Description	How to open
Stock received from third parties	Shows opening balance, products received from consignors, products consumed by consignee, and closing balance.	Go to Warehouse. Under Reports, click Stock received from third parties. Specify the report settings. Click Generate.
Statement of account	Shows opening balance, debits and credits, and closing balance for a certain period by consignor.	Go to Purchases. Under Reports, click Statement of account. Specify the report settings. Click Generate. You can also open the report from a certain account sales to consignor document. This report shows data only by consignor specified in the document. To open the report: Go to Purchases. Under Purchases, click Account sales to consignors. In the Account sales to consignors list, double-click a document line. In the document link bar, click Statement of account.
Supplier balance	Shows opening balance, amounts charged and paid, advances paid and cleared, and closing balance for a certain period by consignor.	Go to Purchases. Under Reports, click Supplier balance. Specify the report settings. Click Generate.

Consignment sale diagram

The diagram below illustrates common steps of the consignment sale process for a consignee.

consignment_sale_process_for_consignor

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