Adding new units to inventory is a critical step for your dealership. Accurate entry is important so that the units are easy to find when searching within the program or when viewed by prospects online.
The first step to setting up a consignment unit is to add the consigner as a prospect in the CRM.
- Open the CRM module and choose the Add New Entity quick link option to the left.
- This will open the new entity screen. Enter the consigner’s information at the top. This will check the program for duplicates. If the person exists, click over their profile row and choose the Open button.
If the person does not exist, click the Create New button to open a new record. The information you entered in the new entity screen will carry across to the new profile.
- If you want to allow service work to be done on the unit prior to the sale without charging the consigner, you must add a credit limit on the consigner's AR Info tab in CRM. Scroll down to Credit Limits and click to Add New.
The number you type for Credit limit is the maximum amount the service department can cash out on the consigner’s account.
Add Consignment Unit
- Open the Unit Inventory module.
- Add the consignment stock.
- Add the unit following the same steps as adding a normal unit.
- On the Consignment tab, you must select the consignment checkbox.
- Click the magnifying glass to the right of the Purchased From field to search for the consigner's entity number. Copy this number for step 9.
The Consignment checkbox allows this unit to be added to inventory without creating accounting purchase transactions. Make sure this box is checked on all consignment units.
The Consignment Amount is the amount to be paid to the consigner once the vehicle is sold, before any service work has been completed.
Purchased From # is the consigner’s entity number. The consigner’s name and contact information will fill out automatically once the entity number has been added.
- On the Financial tab, paste the consigner's entity number into the Flooring/AP Company field.
- Enter the consignment amount into the Floorplan Balance field.
- Enter the AP account's GL into the Consign Acct field.
- Enter a Selling Price.
- Enter a Purchase Price. This should be the same as Consignment Amount on the Consignment tab.
- Fill out the Sale Acct, Inv Acct, and Cost Acct GL fields.
- Save the unit.
Charge for Services
If repairs are needed on the consignment unit, you will need to charge the consigner for the repairs.
There are two options to charge the consigner:
- Charge the consigner for the work before the unit is sold by performing the services and ringing the consigner up as normal to take payment immediately.
- Charge the consigner for the work after the unit is sold, deducting from the amount that the consigner earns from the unit sale. In order to do this, you may need to set a credit limit on the consigner's account.
Set a Credit Limit for Consigner
- Open the CRM module.
- Locate the consigner and open their record.
- Select the AR Info tab.
- Enter a credit limit amount in the Credit Limits section.
- Save the record.
Charge Against the Amount Due to Consigner
- Open the Parts & Service module.
- Create a service invoice.
- The job type for consignment work should be Retail or Customer Pay.
- Enter the work being performed as normal.
- At the cash out screen, you can use the On Account button to create an amount that the consigner will owe the dealership for the repairs.
After The Sale
When the unit is sold on a deal, the accounting transaction should look similar to this:
The payable to the consignee will hit the AP account for the entity that we designated in the AP Company field in Unit Inventory. Since we didn’t actually purchase the unit, our Unit Inventory account will be debited and credited for the same amount for a net of 0.
With a cash deal, the total retail amount will show as a debit to our Unit Deposit Receivables account, which is offset by the deposit transaction.
After the transaction is posted, the consignment amount will show as a payable to the consignee.
Note: If the payable transaction is not created when the deal is posted to accounting, check the Company Settings to make sure that the Deal Desking setting “Consignment – Create Payable on Posting Y/N” is selected.
Pay the Consigner
- Open the Accounting module
- Open the check writer and start a check to the consigner’s entity
- Pay the consignment amount.
- Change to “Customer Refund” Check Type
- Pay any Negative AR balances, and notice the amount of the check is reduced by the amount of the service work.
- Click the Print button to print the check.