Consignment purchasing: receive the consigned stock and sell it

Steps 2 and 3 of consignment purchasing: receive the principal’s units on a Consignment GRN, then sell them through your ordinary tills. It follows Step 1, the consignment purchase order — optional, since Step 2 also receives without one — and ends with the count of what sold that the principal’s bill is checked against. Receive the units on a Consignment GRN, never an ordinary purchase GRN or invoice, and at the agreed reference price, never RM 0: the GRN puts the units into your stock and its amount into the item’s moving average.

The running example: a wireless-audio brand principal places 120 units of a new earbud model at branch GS-KV-01 on consignment, at a reference price of RM 189 a unit; GadgetSphere sells them at RM 249 through its normal tills, and in March 74 units sell.

Check Before you start first: the company’s default consignment stock and consignment liability GL codes, Consignment Item on each item, and both knock-off rows. A missing code does not stop FINAL: the document goes through and its journal is left empty (why).

1. Step 2: receive the consigned stock.
2. Step 3: sell the units, and count what sold.

Step 2: Receive the consigned stock

Inventory > Consignment GRN (Internal) > Consignment GRN > Create

The principal’s van delivers 120 units to GS-KV-01. Count them before you key anything — the count is the warehouse’s, not the principal’s delivery note’s. Set branch and location on Main Details; pick the principal on Account. On the header KO For tab, knock off the order from Step 1: the 120 units come across at RM 189. Without an order, add the line with Search Item (consignment-flagged items only) and key 120 at RM 189. For serialised items, scan the serials; each must be new to the company.

CREATE, then FINAL from the listing. Two of the jobs that run behind that click matter here:

• The stock job books 120 units into stock at GS-KV-01. Stock Balance, Stock Availability and every stock report now count them exactly like stock you bought, and RM 22,680 enters the item’s moving-average cost pool. In the Stock Report’s summaries the GRN falls under Others, not Purchase.
• The journal job, if your company runs it for this document, posts:

Dr  Consignment Stock          RM 22,680
    Cr  Consignment Liability            RM 22,680

Nothing goes to Purchases and nothing to the creditor account in the ledger. The GRN document itself, though, carries RM 22,680 as an open balance against the principal, and the Creditor Report reads document balances, not the ledger — so from today the principal shows RM 22,680 outstanding there. Step 5 says how to read that.

Watch out for:

• FINAL, stock moved, and Trace Document → Journal Txn empty. The journal job failed after FINAL — MISSING_DEFAULT_GL_CODE: CONSIGNMENT_LIABILITY, or NO_JOURNAL_CREATED when no line found a consignment stock account. Map the code and post it as in the callout on the front page. Do not re-key the GRN: the stock job is separate and has already posted. If only some lines found an account, nothing fails at all: those lines are left out and the journal posts short, so compare the journal total with the document total whenever an item is new to consignment. A short journal is rebuilt with Repost beside Posting Journal in Trace Document; Repost deletes the old journal first and shows nothing if it fails, so check Journal Txn afterwards and, if it is empty, use CREATE as above.
• A consignment GRN that has been billed against cannot be voided until the billing is voided first. Get the quantity and the price right before FINAL.

Step 3: Sell the units — nothing special happens here

Cashiers sell the earbuds on ordinary cash bills at RM 249; sales staff can raise ordinary sales invoices. Each sale takes one unit out of stock and posts as any sale does — no consignment flag, no special till procedure. What makes these units consignment is the journal that brought them in, not where they sit. That has a consequence worth knowing now: the cost each sale carries is the item’s moving average, written back onto the line by the costing job, so a consigned earbud sells at a cost of RM 189 only because the GRN said so.

By 31 March, 74 have sold. Before the principal’s bill arrives, the category buyer counts what you sold: the Stock Movement Report in the Stock Report applet, for the item at GS-KV-01 for March, shows 120 in, 74 out on sales documents, 46 on hand. That figure, not the principal’s statement, is what you will bill.

Next: Step 4: Bill yourself for what sold.

What success looks like for this part

Stock Balance for the earbud at GS-KV-01 counts the 120 consigned units from the GRN’s FINAL, and 46 once the 74 March sales are finalised; the GRN’s Trace Document → Journal Txn shows Dr Consignment Stock / Cr Consignment Liability for RM 22,680, if your company posts journals for it; and the category buyer holds the March Stock Movement count — 120 in, 74 out on sales documents, 46 on hand — before the principal’s bill arrives. When the cycle is done, run its success check.

Common mistakes in this part

Receiving consignment on an ordinary Purchase GRN or Purchase Invoice. The screens look alike. A purchase invoice makes it a purchase and a debt on day one: Trace Document shows Dr Purchase / Cr Creditor for RM 22,680 for goods you agreed not to buy, and the purchase counts in this month’s cost of sales. Void it if nothing has knocked it off, and re-key on the consignment GRN.

Keying the consignment GRN at RM 0 while the price is negotiated. The GRN’s amount enters the moving-average pool; at zero it drags the average cost of every unit of that item toward zero, every sale then carries that low cost, and nothing later in the chain pushes it back — the billing and the return write no stock line at all. Key the agreed reference price; if a RM 0 GRN has already gone FINAL, the average is corrected with a Reset MA.

The mistakes that span the whole cycle — month end counting consigned units as yours, and a line GL code that routes nothing — are on the front page.

Related documentation

• Consignment GRN — the receipt document, field by field
• Stock Report — the Stock Movement Report used for the count
• Stock Balance — where consigned units count as stock
• Consignor Purchase Billing — the period worksheet
• Consignment: Settle and Return — Steps 4 to 6