Consignment and P&L

Thanks for reaching out to us, cquigs717.

Yes, there is. You can create a purchase order (PO) and convert it to a bill, expense, or check once you're ready to pay for the items you've sold. Since the purchase order is a non-posting transaction, it will not affect the Profit & Loss report.

If you haven't already, turn on the purchase order feature: I'll show you how.

1. Go to Settings ⚙ and select Account and settings.
2. Click the Expenses tab.
3. In the Purchase orders section, select the edit ✎ icon.
4. Turn on the Use purchase orders options.
5. If you want, enter up to three custom fields and a default message for vendors. These are optional.
6. Once done, hit Save and then Done.

Here's how to create a purchase order:

1. Select + New.
2. Click Purchase order.
3. From the Vendor ▼ dropdown, select the vendor.
4. Review the Mailing address.
5. If you are shipping the products directly to a customer, select the Ship to ▼ drop down and then Ship via. Check the Shipping address to make sure it's correct.
6. Enter the Purchase Order date.
7. Select Settings ⚙ on the Purchase Order form, then on the Choose what you use panel, select the link to add your custom fields.
8. In the Item details section, enter the products you want to purchase.
9. Once done, hit Save and close. 

Add or covert the PO to expense, bill, or check once you're ready to pay it so it will reflect in the Profit & Loss report. Refer to this article for a complete guide: Add purchase orders to expenses, bills, or checks in QuickBooks Online.

Furthermore, you can follow the steps below to improve the process of handling consignment in QuickBooks Online.

1. Set up consignors as vendors and classes.
2. Set up consignment income accounts and items.
3. Record consignment sales and payouts.
4. Create consignment reports.

You can use this resource for a more comprehensive guide: How to record consignment sales.

In addition, I've included the following link to assist you in personalizing your report to show only the information you require: Customize reports in QuickBooks Online.

Let me know if you need anything else. I'll be around to help you.

@cquigs717 

"We have all of their invoices entered into QuickBooks though and so the P&L obviously looks insanely off."  Your P&L should not be affected by bills for inventory, only your balance sheet, and that's only for non-consignment inventory.  Since you do not own the consignment inventory (the consignor does), only the consignor can have the inventory on their balance sheet - two taxpayers cannot claim the same inventory.  It sounds like you're aware that there are no payables to track with consignment inventory until AFTER it has sold.   

The proper way to deal with consignment inventory is to track it outside of QB.  Alternatively, if you want to see the volume of inventory in QBO, you can create a journal entry whenever you get consignment inventory: debit consignment inventory, credit inventory asset.  This will show your consignment inventory total with a corresponding negative total for your inventory asset account so they net to zero and have no net effect on your balance sheet.  Again, since you do not own the inventory, from an accounting standpoint, you do not want consignment inventory to have any effect on your financial statements until after it has sold.