Consignment Software Settlement Features

What is Consignment Settlement? Understanding Payouts to Consignors

Consignment settlement is the crucial process of paying consignors for their sold items. Essentially, it's how businesses calculate and disburse the money owed to individuals or entities who have placed goods on consignment.

Key Aspects of Consignment Settlement:

• Calculating Consignor Payouts: This involves determining the consignor's share of the sales proceeds after items have been sold.
• Automation with Consignment Software: Modern consignment software streamlines and automates the entire settlement process. This includes:
  • Quick and accurate calculation of amounts due.
  • Ability to easily add bonuses or deduct various fees (e.g., commission, processing fees).
  • Efficient management and tracking of disbursements to consignors.
• Transparency and Efficiency: Automated settlement ensures transparency for both the consignor and the business, while significantly reducing the time and effort traditionally associated with manual calculations.

By leveraging consignment settlement best practices and specialized software, businesses can ensure timely and accurate payments to their consignors, fostering strong relationships and efficient operations.

Understanding Consignment Settlement Records

Each time a consignment sale is completed, a 'settlement document' is prepared automatically. This means that the software has recorded the sale and credited both the consignor's account and the shop's account for their respective shares of the sales proceeds.

A separate record exists for every consignor who has sold items and has not yet been paid. Settlements can be processed individually or in batches, grouped by method of payment. For example, all consignors to be paid by check can be processed as a group (batch settlement).

The Consignment Settlement Process

Settling with one consignor at a time allows for adjustments for bonuses and fees. For instance, a bonus might be awarded for accepting store credit as payment. With Best Consignment Software, this bonus can be based on either the amount of the sale or the consignor's share.

Fees may be deducted for cleaning, repairs, shipping/delivery, etc. An advanced feature of BCSS is the ability to automatically deduct set fees, such as a percentage for sales paid by credit card.

Key Features of Best Consignment Software

• Payment splitting between cash, store credit, check, and gift certificates.
• Editing of completed settlements for adjustments in date, additions, deductions, and notes.
• Settlement processing for one or more items but not all items.
• Inclusion of layaways in settlements.
• Printing of settlements with settled items listed, allowing for two settlements per page.
• Correction or voiding of incorrect settlements.
• User-defined fees that can be deducted automatically.

Settlement Timing Explained

An 'aged batch settlement' refers to settlements for prior months, while a regular settlement pertains to the current month.

Settling with Consignors for Store Credit

Conventional consignment software typically provides payment options of cash, check, or gift certificates. However, settling with consignors for store credit offers several advantages:

1. Sales proceeds remain 'in house' for future purchases.
2. Convenient tracking of amounts outstanding.
3. Reduction in paperwork.
4. Less cash required on hand for settlements.
5. Avoidance of check writing and distribution.
6. Less administrative complexity related to gift certificates.
7. Adding professionalism by managing compensation options effectively.

Store-Credit Bonus Incentives

While people often prefer cash in hand, store credit can offer a greater sense of loyalty and trust when managed well. Sellers may be willing to accept store credit instead of cash if incentivized with a bonus yielding a greater settlement amount.

Dynamic Software Options for Settlements

Best Consignment Software includes a feature to add an additional amount to settlements for payment made via store credit. The bonus, expressed as a percentage, is configurable in the program's settings. When store credit is selected as the payment method, the program automatically adds the bonus amount.

A dynamic option in BCSS allows stores to base the bonus on either total sales or the settlement amount, offering flexibility in how incentives are structured.

For example, if the consignor's percentage for cash settlement is 50%, their share of $100 in sales proceeds would be $50. However, a 10% bonus for store credit could translate to either $10 (if based on total sales) or $5 (based on the settlement amount).