Consignment accounting

[vhickey]

How do you set up accounts for a business that is a retail clothing store,
where they buy alot of their own items, but they also do sales on
consignments and this probably is 60% of their sales. To keep track of
what is consignment and what is not???
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[Paul Thomas, CPA]

How do you set up accounts for a business that is a retail clothing store,
where they buy alot of their own items, but they also do sales on
consignments and this probably is 60% of their sales. To keep track of
what is consignment and what is not???

In the set of the financial books, there's not much to record. It's not
your inventory, so that doesn't get booked. You don't owe anything till the
sale gets made, except for giving back the stuff. When a sale happens, you
would record the sale and payment, and then show consignment costs (COGS)
and the liability to the person who placed it on consignment. I suspect
that most places work the consignment into the financials on a daily or
weekly basis.

You're almost going to have to have a stand-alone software package
(http://www.softwaregallery.com/ or
http://www.bestconsignmentshopsoftware.com) or any of the other sites you
could google - or a ledger book to keep track of the individual consignment
items.

Some workable combination of manual and machine should be fine. I'd start
by asking around in like-kind places as to what they do and how they do it.
Maybe take it on the road to get out of your direct competition for your -
and their - privacy.