Consignee / Consignor - How to record in Financio

Although not the most comprehensive tool for inventory management, Financio's basic inventory tool can still be utilized to manage small scale consignee/consignor transactions. Here's a in-depth guide:

I'm a Consignee

From a consignee's point of view, kindly follow the steps below:

1st Step:

• Create a Consignment Inventory Account. Go to Control Panel > Account > Add New > New Account. You can visit this link to learn how to create a new account. Make sure the Type* is Current Asset.
  

2nd Step:

Create a new item in Products & Services. Make sure the inventory account is linked to the Consignment Inventory account you’ve created.

3rd Step:

Create a Purchase bill with zero value.

Why zero value? Because the title of the goods is yet to be transferred to you. Hence, the cost of sales cannot be recorded yet.

4th Step:

Sell the consignment item through issuing of sales invoices. Make sure the same SKU number for the Consignment Item is used.

5th Step:

At the end of the month, you'll need to inform consignor how many units you have sold. From here, with the invoice provided by the supplier, you'll need to create purchase bill but this time, have it linked to your cost of sale account.

Note: Please make sure to choose the cost of sales (COS) account, same with COS account you set under step 2.

I'm a Consignor

1st Step:

• Create a Consignment Inventory Account. Go to Control Panel > Account > Add New > New Account. You can visit this link to learn how to create a new account.
  
  Note: Make sure the Type* is Current Asset.
  

2nd Step:

Create a new item in Products & Services. Make sure the inventory account is linked to the Consignment Inventory account you’ve created.

The following is an example of created consignment item. Be sure to differentiate between your actual trading stock and your consignment stock.

Note: In the example, we've used the letter 'c-' to denote the consignment item.

3rd Step:

Transfer stock from trading inventory account to consignment inventory. You'll need to use inventory adjustment module to transfer stock.

Please click here to learn how to do an inventory adjustment.

Decrease stock from Inventory Account

Increase stock from Inventory Account

As a summary, trading Inventory Account decrease by 50, Consignment Inventory increases by 50.

4th Step:

The final step is to record sales as and when updated by your consignee. Based on your agreement with your respective consignees, you will invoice them on a monthly, bi-annually or even annually.

In this example, it is monthly basis and 25 unit had been sold in the month.

When issuing the invoice, be sure to select the consignment item which is indicated with the 'C-' as per the image below.

With this setup, you'll be able to easily keep track of the remaining stock in your consignment account.

And there you have it, a full guide on how you can utilize Financio to manage your consignee/consignor accounts. 

Any concerns/confusions? Feel free to share them in the comment section below!