Consignor Software and Settlements
When a consigned item is sold for its owner (consignor), the seller is due a percentage of the sale (and if applicable, a sales person is due a commission). Payment to the consignor (and employee) finalizes or 'settles' the process of selling consigned items and distributing the proceeds.
Using Consignor Software to Track Accounting Settlements
Best Consignment Shop Software records inventory received and sold. BCSS computes the amount owed the consignor (and sales person) and records the items settled. To finalize the transaction, the total is processed and BCSS creates a disbursement record.
Processing Settlements and Commissions
BCSS lists sold inventory items and what the consignor's (and sales person's) share(s) of sales are. There is complete freedom in processing from that point, keeping a couple of things in mind:
- Not all of the items listed need to be settled. The left column on the in BCSS contains check marks. Unchecking an item will exclude it.
For example, if only $25 is to be disbursed (paid) of $50 due, reduce the total due from $50 to $25 by removing check marks. (Unchecked items will appear again the next time a transaction is processed.)
- The amount shown as due need not be paid. Any amount can be paid as agreed upon by you, the consignor and/or the salesperson. Regardless of the amount paid, BCSS will consider all checked items settled or commissioned.
If an error is made in processing, it can be deleted. All inventory entries concerning the settlement will be reversed. The next time a settlement is processed for this consignor, the inventory items will be presented again for settlement.
It is not possible to delete a commission. Related settlement disbursement documents also cannot be deleted, but they can be edited. If a disbursement status is set to 'Not Approved', the amount will not be included in report totals.
Settlement amounts can be credited to a consignor's account to fund purchases of store merchandise. To do this, choose 'Credit' as the payment method in the payment area at the bottom. There are two payment lines in the payment area to facilitate splitting the payment into two parts as needed.
A 'Sale' increases shop owner income, consignor (and employee) balances. A 'Settlement' decreases owner income and consignor balances.
(BCS Consignors Software provides an 'employee commission process' for recording payments made to employees. Commissions processed for employees do not affect consignor balances. Settlements processed for consignors do not affect salesperson balances.)
$100 in sales has been made for consignor Joe by salesperson Sam. Joe is to receive 40% of the sales price and Sam has earned a 5% commission. These amounts must be disbursed but first, the sales transactions must be 'settled'.
Sales of $100 increase shop income by $100. Joe's balance becomes $40. Sam's balance becomes $5.
After settling with Joe, the store's income is $60 ($100 in sales less the Joe's share of $40). Joe's balance is zero, and Sam's amount remains unaffected at $5.
After paying Sam's commission, the store's income is $55 ($60 - $5). Joe's balance is unaffected and remains at zero. Sam's total is zero.
In this example, Joe's balance before was $40. BCSS would display this as:
|Account Bal. + Store Credit||$40
|Store Credit||$ 0
When his payment is processed, you might choose to pay $30 by check and $10 as credit. His account total will then be:
|Account Bal. + Store Credit||$10
Notice that the store amount is the amount transferred.
Now Joe wants to buy a used bicycle for $5. After processing this sale his account amount is:
|Account Bal. + Store Credit||$ 5
|Store Credit||$ 5
Notice that store credit decreases as he purchases merchandise. If some of Joe's consigned merchandise is sold for $12 for example, his account balance would be:
|Account Bal. + Store Credit||$17
|Store Credit||$ 5
Joe is owed $12 for the consigned merchandise and he has no more available for making purchases.
BCSS provides comparable functionality for handling employee purchases of store merchandise from their commissions. The process is the same for employees as it is for consignors.