Consignment takes place where goods are transferred from the owner (consignor) to an agent (consignee) for the purpose of sale by the consignee on behalf of the consignor. It is important to understand that the relationship of principal (consignor) and agent (consignee) exists and because of this agency relationship, ownership of the goods does not transfer to the consignee.

The consignee as the selling agent is entitled to a commission for selling the goods: expenses may be incurred by both parties: and periodically or on completion of the consignment, settlement is effected between the parties. If any goods remain unsold then it is generally returned to the consignor. The Loans/Consignment facility also allows goods to be dispatched from a Wholesaler to customers on a Loan or Trial Basis. [Read more…]

Loans & Consignment process flow

The Loan/Consignment process starts off with the setup of the Specific Control Files in the General Ledger; Consignment sales are processed in the same way as normal sales. The necessary Accounts need to be established.
The transactions are selected from the Loan/Consignments Menu within Orders Main in the Distribution Module.
To record an order, select the menu option Loan/Consignment Issue. These Issues are dispatched at zero charge. The Movement type is (TFO=C) Transfer Out.
Finalize the order through Distribution processing for Pending =P, Batch printing =K, Picking Slips =D, Document printing =A, Invoice dispatch =I, and Completed status =C.
The inquiries and reports within the Loans/Consignment Module will not reflect the transaction until the transfer is complete (status C).
The quantity will be shown in the Stock Balance field ‘New’. The Movement type is (TFI=D) Transfer In.
If the stock is unsold by the end of the Expiry or cut-off date, a Returns Authorization Notice is printed and sent to the Customer. Select the menu option Loan/Consignment Returns Notice to generate the paperwork. The transaction is flagged as having the first notice sent and this process can be repeated as often as required.
When the stock and Returns notice have been received, select the menu option Loan/Consignment Return or menu option Warehouse Management Returns for consignment. (Note: this is normally a warehouse function). This option will return the stock in one process (Instead of a normal claim process). The quantity will be shown in the Stock Balance field ‘Rtns’. The Movement type is (TFO=C) Transfer out.
If the stock is sold, select the menu option Loan/Consignment Sale or Order Sale from the Stock Balance Inquiry. This option will copy all the details from the original transfer and these details can be changed if not all stock is sold. This will generate a charge only invoice. The quantity will be shown in the Stock Balance field ‘Sales’. The Movement type is (INV=A) Invoice.
If the sold stock is to be returned for any reason (example Damaged) then process the return as a normal Credit through the Claims Module back to the Consignment Warehouse. The quantity will be shown in the Stock Balance field ‘Sales’. The Movement type is (CRD=B) Credit.
If an Adjustment is required to write off or write up the stock in the Consignment Warehouse select the menu option Loan/Consignment Adjustment to complete this process. The quantity will be shown in the Stock Balance field ‘New’. The Movement type is (ADJ=E) Adjustment.

Loans & Consignment

Processing

Inquiries

Reports