The Consignment Clearing account is a General Ledger (GL) control account used in Blackpurl's accounting integration to handle the financial transactions that arise when a dealership sells a consignment unit on behalf of its original owner. This article is Step 4M of the Understanding Accounting Integration series. To see all steps, refer to Accounting Integration Setup: All Steps.
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The Consignment Clearing General Ledger account is a liability account used to clear financial transactions for consignment unit sales. Consignment units are customer-owned units held by the dealership and sold on the original owner's behalf — the dealership does not purchase these units outright.
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Because the dealership never takes ownership of a consignment unit, these units do not appear in the dealership's inventory General Ledger. The Consignment Clearing account provides a way to route and clear the related transactions through your accounting package once the unit is sold. For details on how to mark a customer-owned unit as a consignment unit in Blackpurl, see Consignment Units: Adding and Selling.
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The Consignment Clearing General Ledger account is triggered when a consignment unit is added to a Customer Order as a Unit Deal and that Unit Deal is finalized. At that point, Blackpurl records a journal entry to the Consignment Clearing account representing the funds owed to the original owner or seller. The offsetting entry goes to the relevant Cost of Goods Sold (COGS) General Ledger account to complete the sales entry.
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When the consignment unit is sold, Blackpurl creates a journal entry to the Consignment Clearing account. The entry records the amount due to the original owner or seller, with the offset posted to the relevant COGS account. The example below shows what this journal entry looks like in the accounting package.
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Blackpurl integrates an Adjustment Note to your accounting package to facilitate payment to the original owner or seller of the consignment unit. This Adjustment Note is processed as a refund in the accounting package.
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The journal entry from the sale and the Adjustment Note together produce balanced entries to the Consignment Clearing account, leaving it with a zero balance once payment to the original owner is processed. The account history for the Consignment Clearing liability account reflects both sides of this transaction.
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The Consignment Clearing account should always function as a true clearing account — it should return to zero balance after each consignment sale is fully processed.
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Accounting entries to the Consignment Clearing General Ledger account must never be posted manually in your accounting application. All entries to this account are generated by Blackpurl and should remain exclusively the result of Blackpurl transactions.