Consignment Stock Process (as consignee)
* extra N2 implementation costs required
Introduction
When a supplier provides materials and stocks them in the company’s premises, the material remains in the books of the supplier until the same is withdrawn from the stock of the consignment and be sold or put to use. A configuration has been applied so that whenever a pack (or pallet) is opened or partially consumed, the entire pack (or pallet) is considered consumed.
Configuration Required
On N2, each supplier to supply consignment stock must have a consignment stock location created and set against the supplier. When the stock is receipted or sold, the stock movement will be recorded against the location.
System Parameters menu > Products > Locations tab
Creating a new consignment location:
1. Choose the branch where the location belongs to
2. Enter a numerical location code; this is done by looking at the list of the existing codes and find the next available number; Do not use alpha-numeric codes
3. Enter a name; to make the list of locations easier to identify, prefix the consignment location name with “Consignment: “
4. Tick the “Consignment Location” box
5. Enter (or search) the supplier name
6. Click Save
Process Flow
Creating a Consignment PO:
Purchasing menu > Consignment PO, click “Create New PO” at the top toolbar
Enter these details
1. The supplier code or search for the supplier name
2. Once the supplier is entered, N2 checks if the supplier has an associated consignment location. If not, an error message pops up indicating that
3. The Location is assigned to the supplier’s consignment location code automatically
4. Delivery Date
5. Optional: Delivery & Special Instructions
6. Enter thru the products to be added to the purchase order
When a product is entered, N2 brings up
1. The supplier’s price from the Suppliers price book (Suppliers menu > Supplier Pricing)
2. If there’s no supplier price defined, it loads the last purchase ordered price (if any), you can override its PO price in the “Supplier Price” field
3. The Supplier Product Unit (if any)
4. If the supplier product unit is different to the Stock Unit (the stock unit is used within N2 for selling and other functions), then whenever you enter an Order Qty, the Supplier Ordered Qty is calculated automatically. This is based on the Conversion Factor defined in the Suppliers price book
Receipting a Consignment PO:
Warehouse menu > Inbound Board
1. The stock has arrived at the warehouse
2. Check off what’s actually received vs the suppliers’ packing slip
3. Record the Pack numbers
4. On the Inbound Board, click on the PO to receive
5. Enter the Supplier/Shipment Ref (usually it’s the invoice number or packing slip number)
6. Enter thru the actual number of units received
7. Click “Receive Stock”
8. At this stage, the operator has to enter the Pack numbers recorded earlier
9. Once the stock has been receipted, two documents are printed
a. “Consignment Goods Received” for filing purposes
b. “Consignment stock label” for sticking onto the stock packs/pallets for easy of identification of the consignment stock
Withdrawing or dispatching consignment stock
When a picking slip of a sales order is printed, N2 automatically assigns the suggested bin locations onto the picking slip. This tells the operators where to pick the goods. During the suggestion process, N2 shows the company’s own stock locations first.
When confirming the picking slip, the operator has to
1. Verify and tell N2 actually where the stock has been picked from, i.e. how many units picked from own location and how many from which consignment location
2. Enter the pack numbers used for the consignment stock dispatched
This tells N2 which pack has been opened.
e.g. Sales Order location = Goulburn
dispatched 20 units of a pack of 50
N2 will transferred the pack of 50 to Goulburn at the company branch average cost
and then dispatch it off Goulburn
Consignment Consumption Advice:
Consumption Advice is the document used for billing consigned material. It is a formal document used to communicate to the supplier, the quantity and the receipted value of the consigned material based on the supplier who produces the invoice.
Stock menu > Consignment Consumption Advice (if this is not found, refresh your browser to see this menu item)
Use this program to generate advices which can be emailed to the suppliers.
1. It displays all the advices that have already created before
2. You can see whether or not an advice has been emailed to supplier
3. If you see a number in the brackets of the “Generate Consumption Advice” top toolbar button, it means there is/are outstanding packs opened that an advice can be generated
4. Click on the “Generate Consumption Advice (xx)” button
5. Review the list of packs opened
6. Select one or more or Select All
7. Click “Generate Consumption Advice”
8. It will create the next sequential advice number and assigned the packs to this advice number
9. On the main list of advices, click on an advice to view its packs, Print or email
Invoicing the consumed consignment stock:
You can enter the supplier invoice into
1. N2’s financials via the program from Suppliers menu > Enter Transactions
2. Or for Xero integrated, enter this invoice on Xero
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Consignment PO GL entries: |
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PO receipt |
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no GL entries |
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Stock consumed |
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Stock |
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Consignment Stock Holding |
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Supplier invoicing |
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Consignment Stock Holding |
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Creditor |
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Consignment Xero Transactions Incurred:
1. Sales invoice – Draft
Trade debtors Debit
Sales Credit
GST Credit
2. Zero billed purchase – Draft
Cost of goods sold Debit
Purchases (if any from own stock) Credit
Consignment purchases holding Credit
e.g.
3. Manual journal – Draft
For any the consumption of the entire pack if only it’s partially consumed off pack or cracked open
Purchases Debit
Consignment purchases holding Credit
4. Supplier invoice – to be manually entered into Xero or on N2
Consignment purchases holding Debit
Trade creditors Credit