The Consignment stock card differs from the non-consignment in a number of key areas. It is key to understand that the dealer never owns the vehicle itself. The dealer may own some “reconditioning” costs associated with it, but not the vehicle itself. It is never purchased from the vendor, as title passes straight from the vendor to the customer. There will never be a Purchase Invoice raised for the vehicle itself.
The Purchase tab as it exists on non-consignment stock cards is not visible; rather it is replaced with a “Consign” tab. Details of the Consignment transaction can be recorded here, such as the Reserve Price and any notes or conditions that form part of the Consignment arrangement.
Provision is made for various invoices to be issued to the vendor in respect of fees or costs relating to the holding of the vehicle on consignment. Most of these invoices will be created as Sale Invoices, permitting a Customer Payment to be applied from the vendor. The final transaction accounting for the sale of the vehicle is created as a Purchase Invoice so that a Vendor Payment can be issued to the vendor in settlement.
The profit on the resulting sale is derived from the commission charged to the vendor, plus any other fees charged to the vendor, plus any “add-on” items sold to the customer.
Add a Recoupable Reconditioning entry
Add a non-recoupable reconditioning cost
Sell other items on the consignment vehicle
Issue a Tax Invoice to the purchaser
Take a deposit on Sale of a consignment vehicle
Receipt payment for a consignment vehicle
Statement to the Vendor for the Sale
Pay the net proceeds to the Vendor
Pay yourself for commission and other items
Why does the commission appear in both Payables and Receivables?