Quickbooks Inventory and Sales

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QuickBooks and Consignment

Merchandise placed on consignment with a reseller can be entered, tracked and sold using QuickBooks but as this discussion will bear out, QuickBooks is not a consignment-software program and as such makes the business of managing and selling consignments complex and confusing.

How To Manage Inventory In Quickbooks

Enabling inventory tracking in QuickBooks Online Plus allows for consignments to be batch entered and edited. QuickBooks Online Plus tracks item quantity, sales and cost of goods sold.

Activate inventory tracking with quantity on hand:
  1. Click on the Gear icon and select Account and Settings.
  2. Select Sales on the left.
  3. Next to 'Products and Services' click on the pencil and select 'Track quantity on hand'.
  4. Click Save.
Activate inventory tracking by Importing Products and Services
  1. Log into the company file.
  2. Go to Gear icon > Import Data > Products and Services > Browse and navigate to and select the file to import.
  3. Open > Next
  4. The imported items will be displayed.
  5. Edit where needed.
  6. Import.

Tracking Inventory In Quickbooks

Print the Physical Inventory Worksheet for a physical inventory at your shop. Access the report under 'Manage Products and Inventory' on the Reports page.

How To Record Consignment Inventory In Quickbooks

Open the 'Products and Services page': Gear icon > List > Products and Services.

The Products and Services page displays all inventory quantities, costs, selling prices and so on.

Add individual items using the 'New' button or import from Excel (New > Import).

On the Product/Service information window, you may select one of the four types of items: Inventory, Non-inventory, Service and Bundle.

Quickbooks Consignment

Consignment is the placing of new or used merchandise in the custody of is person or entity in the business of reselling others' belongings. Ownership of the properties remains with the owners who retain the inherent risks of property ownership but the responsibility for consignments may fall upon the consignee if a signed legal agreement doesn't stipulate to the contrary.

Using Quickbooks For Consignment

With QuickBooks Online Plus use the built-in inventory feature instead of tracking consignment sales manually. The program tracks consignment sold, payouts to consignors and produces reports. QuickBook users have reported that because this program is not a true 'consignment software', setup and use can be quite cumbersome.

How To Record Consignment Sales

There are five prerequisites for configuring QuickBooks to record consignment sales:

  1. Create consignor records as vendors and define classes.
    1. Click on 'Expenses' on the left.
    2. Choose 'Vendors'.
    3. Press New Vendor/Supplier and enter the person or entity's information.
    4. Save.
    5. Repeat the procedure for each consignor.
  2. Establish individual income accounts for keeping track of sales.
  3. Enter consignments and associate each one with the income account.
  4. Record sales and payouts under the correct items and classes.
  5. Create reports showing desired data.

Consignment In Quickbooks Enterprise

QuickBooks doesn't know about 'consignments' like dedicated consignment software does. It separates purchases and sales so there is no way to link a purchase with a sales order showing consigned items.

With consignment software, When an item is sold, the consignor and store are credited for their respective shares of the sales proceeds. Such programs have a great degree of flexibility and useful features like assigning a consignor percentage to each consignor and each consignment.

Chart Of Accounts For Consignment Shop

It's necessary to create two accounts in the Chart of Accounts to sell others' merchandise for a share of the sales proceeds.

  1. Create an 'Other Current Liability account' and name it 'Consignment sales – liability.'
  2. Create an Income account named 'Commission Income'.
  3. Add items to the item list. Open the New-Item screen. Select Type 'Service' with Item-Need a minute please/Number of 'Reduce Liability for Commission' and associate it with 'Consignment sales – liability' account. Enter a rate of -25% (negative 25%) for example.
  4. Create a second Service item named 'Commission Income' and associate it with the 'Commission Income' account, 25% for example.
  5. Select 'Inventory Part' as a Type and name it 'Held on Consignment' and relate that to the regular 'Cost of Goods Sold' and 'Inventory' accounts
  6. Use 'Consignment sales – liability' account for the Income account.
  7. Establish a subitem of 'Held on Consignment' for all items from vendors. Each item will be linked to the same accounts ans the main consignment account.
  8. Create a Group item for each consignment.
  9. Create a record for each consignor. This gets a bit confusing: "The consignor sells these items to you for $0 so enter the total on a bill for $0".
  10. When a sale is made enter the invoice but use the group for each item. They will not appear on the printed invoice and the seller's share will be calculated in the background.
  11. The buyer will see the invoice without the individual lines.

As a developer of consignment software this design appears to be very complex and confusing. Take a look at consignment software below.

Quickbooks Consignment Inventory

Consignments can be set up after other accounts are in place:

  1. Press the Gear icon at the top of the page and go to 'Product and Services'.
  2. Click on 'New'.
  3. Type the name of the consignment.
  4. Use the 'Consignment Sales Income Account' for the account.
  5. Save.

Price labels and hang tags can be printed from these pages: inventory, transfer slips, Price-Change-Reminders, Price-Manager and Physical-Inventory, and from purchase and receiving documents.

Quickbooks Consignment Software

QuickBooks can 'handle' consignment but cumbersomely.

Business owners who own more than one shop and/or more than one business might find combining all businesses in QuickBooks useful but most consignment-software programs are complete inventory-sales-accounting programs, making QuickBooks and other 3rd-party accounting systems largely unnecessary.

The down side to the 'consignment software industry' is that there is no Microsoft or Intuit - a major software developer - providing consignment software, so the 'industry' is adulterated individual programmers mostly attempting to give the appearances of longevity and reliability.

The fact is most consignment-software programs do the same basic things and if this page conveys nothing else: There is no software program for resellers that warrants $1,200+ up front ($100/month) and any software requiring an 'annual support fee' doesn't deserve a second look. For a good start and a solid basis for comparison, download the Best Consignment Shop Software demo and take advantage of the free live demo. During the demo you can verify:

Afterward, look further if you like. You'll find individual programmers trying to get as much as they can from every consignment shop that uses 'his' software. And for the love of money, don't bother with 'Consign-pro'.

Quickbooks Consignee

The 'consignee' is the entity taking possession (not ownership) of the property of others for the purpose of reselling it and splitting the sales proceeds for a 'commission'.

Quickbooks Consignor

The 'consignor' is the owner of merchandise who places his or her or its property with a reseller and who agrees to pay the seller a commission (only when sales are made).