Step 4M - Understanding Accounting Integration - Control Accounts - Consignment Clearing

This article is Step 4M of Understanding Accounting Integration - Control Accounts > Consignment Clearing

To see all the steps of Understanding Accounting Integration, please review - Overview - Understanding Accounting Integration

Step 4M - Control Accounts - Consignment Clearing

• This General Ledger account is used as a Clearing Account for Consignment Unit transactions and the account type is generally set up as a liability account

• Consignment Units are Customer Owned Units held by the Dealership on consignment until sold

The link to this article will explain how you indicate that a Customer Owned Unit is on consignment - Consignment Units

• As the Dealership is not actually purchasing the Customer Owned Unit, these units will never show up in the Dealership's Inventory General Ledger so we need a way of clearing these transactions through your accounting package once the unit is sold and we use this Consignment Clearing General Ledger account to do that

• Once the Consignment Unit is added to a Customer Order > Unit Deal and the Unit Deal is finalized is when this Consignment Clearing General Ledger will be used

When the Consignment Unit is sold, there will be a journal entry to the Consignment Clearing General Ledger

It will for the funds due to the original owner / Seller of the Customer Owned Unit / Consignment Unit as the Dealership has sold the unit on their behalf

An example of the journal entry where the funds await payment to the original owner / Seller of the Consignment Unit with the offset to the relevant COGS General Ledger to complete the sales entry:

This is the Adjustment Note that Blackpurl integrates to your accounting package for you to pay the original owner / Seller for the Consignment Unit which is processed as a refund: 

The following will show you the balanced entries to the Consignment Clearing General Ledger account

• This Consignment Clearing General Ledger should be a true clearing account.  

Restrictions

Accounting entries to this General Ledger account should never be manually posted in the accounting application as it should be for Blackpurl transactions only