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Tracking Consignment Goods as Inventory in Quickbooks POS

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We sell artwork on consignment in a brick and mortar shop. As recommended by others, we've been using Purchase Orders to track items in POS, and receiving items as they are sold. We then pay bills at month end in Quickbooks Desktop.

We want to add an online store, and need to have a more accurate way to account for consignment inventory. I think I've come up with an account mapping between POS and Desktop that will allow us to do this.

Income Account - Consignment Sales

COGS - COGS

Asset Account - Inventory Asset

Purchase Clearing - Inventory Asset

When we receive items we don't include billing information. The inventory shows up correctly in POS. In Desktop, Inventory Asset Account transactions cancel each other so there's no impact on the consigned goods.

At the end of the month, we generate a sales report for each artist from POS and enter and pay a bill for the total of items sold during that period.

Everything seems to work until we need to return unsold consigned artwork to our artists. When we process the vendor return in POS, the transaction that posts in Desktop is an unnecessary credit memo.

My questions: (1) Can you see anything wrong with our approach to tracking consignment items? (2) Is there a way to process a return to vendor that won't generate a credit memo? (3) If not, is there an issue with manually deleting the credit memo in Desktop?

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ShiellaGraceAAnswer

Thanks for visiting us here, @KathyR.

I have some information about recording return items. You're on the right track in processing your consignments. You'll want to delete the credit memo and record your return.

Here's how:

Go to the Vendors menu at the top.
Choose Vendor Center.
Hover towards the vendor's profile and open the credit memo from the Transactions tab.
Click Delete.

Once done, proceed with recording the vendor return in POS.

For details about consignments, check out this guide: How to handle consignment items in QuickBooks Point of Sale.

I'm also attaching our help content to help you manage POS transactions: QuickBooks Point of Sale.

Please let me know if you have follow-up questions or concerns with return items. I'm always here for you. Take care and have a good one.

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