Consignment Inventory: Processing | Brightpearl Video Lecture | Using Brightpearl:Sales Order Processing - E-Commerce

this is the first of two consignment
inventory videos where your inventory is
held by your customers so to help
explain consignment inventory we've got
this graphic in the first case your
supplier sends our inventory to you on
consignment and you hold it you sell it
but you don't have to pay for it until
you've sold it the second case is where
you send inventory to your customer on
consignment
so you own it and you don't actually
charge them for it until they've sold it
consignment inventory can exist
alongside standard inventory so here for
example alongside your consignment
inventory you've got from one supplier
you can have standard inventory that
you've purchased normally for another
supplier if you're sending inventory on
consignment to your customer this is
typically going to be things that you've
either manufactured or you've bought
from another supplier in this video we
look at the yellow example consignment
inventory with your customers here's how
it works
there are two different phases first of
all is setting up and reserving the
inventory for customer and the second
one is what to do when items are sold so
first of all create a sales order for
your consignment customer and what we're
going to do is create a new order status
called consignment so you can see what's
out on consignment you then add items to
that sales order and allocate the
inventory and the important thing here
is not to market is shipped because you
still own the inventory you can't ship
it because shipping it will remove it
from your inventory remove it from your
balance sheet and therefore your
accounting will be wrong so the second
stage is perhaps monthly when the
customer sends you a report of what
they've sold you create a new sales
order and the items that they have sold
invoice and mark this is shipped you
then remove those items from the
original consignment order which is
holding the remaining inventory
allocated for this example we're going
to be working with a GoPro waterproof
sports camera I've got a hundred in
stock and eight allocated live in ninety
to one hand
so these allocated are actually out on
consignment with customer but I can't
see that at this level all I can see is
that we've got three allocated to A to C
sports and five allocated to pack West
what we've actually done here is we've
created a sales order for each of these
consignment
customers we've put it onto the status
consignment and you can see here that
there are five allocated out of the five
on order because this inventory is
allocated to this particular customer
it's not going to sell to anybody else
using an order status you can see the
exact retail value of consignment
inventory that's out with customers from
the sales dashboard or of course you can
filter the sales list to just show your
consignment sales now you don't want
fulfill these sales so be careful when
you're batch fulfilling from the sales
list the best thing to do is actually to
show the filter and from the status menu
select all you need but on tech
consignment probably unpick completed
and cancelled as well and then filter
the report which of course will exclude
this consignment sales you can then go
ahead and batch fulfill as normal what
I've also done is set a 30-day trigger
on the order status for consignment
which means that after 30 days if you've
not updated a sale which probably means
you haven't spoken to this consignment
customer you'll get a reminder on the
left-hand side and this is saying that
two sales on status consignment haven't
been updated in 30 days I can click that
to see which consignment customers I
need to speak to to set that up all you
need to do is set a reminders of 30 or
however many you want to on the
consignment status if you want to see
which consignment customers any given
item is on consignment with go to
reports and then sales detail which
shows the line items for every sale show
the filter put the name or SKU of the
item in the search box and then filtered
to your consignment status this will
show all the gopro cameras out on
consignment so now let's say it's the
end of the month and Jimmy sent us a
report to say he's just sold one of
those GoPro cameras will create a new
sale for Jimmy we'll add the camera
quantity one at whatever price were
going to charge him Save Changes the
next thing we need to do is market is
shipped because he's actually sold the
item we're going to remove it from our
inventory and our assets so fulfill and
markers shipped you
all your inventory is out in consignment
you won't have enough on hand to do this
so you'll need to release it from the
original sales order first next we'll
send him an invoice so let's click
invoice and then email it off as normal
we'll now go back to the original sale
which is holding the rest of the
inventory and remove the GoPro that
we've just invoiced for the first thing
we need to do is reduce the quantity
allocated down to 2 hit Save Changes
which then lets us reduce the quantity
on the order down to 2 and again save if
I do a sales search for this particular
customer we can see that we've just sent
him an invoice this top entry and he
still has some items out on consignment
the process that I've just shown you is
created to accounting entries and here
we can see these on the income statement
or profit and loss report so the sales
entry is created when the sale for that
one go pro at the end of the month was
invoiced and the cost of sales entry or
cost of goods sold was entered when I
shipped that same order so when I
fulfilled and shipped at the point of
shipping the cost of sales entry was
entered into my accounts so whilst any
inventories allocated to the customer
there's no accounting entry made which
means you still own the asset and it
shows properly on your balance sheet
that takes us up to the end of part 1 of
consignment inventory part 2 is where
your supplier sends you inventory on
consignment that you don't need to pay
for until you've sold it