Consignment and Memo items are identified in The Edge as such via the Stock Type field in the item record. By properly selecting memo type or consignment type, The Edge can greatly improve the management of payables and accounting. Once the items are properly identified as Consignment or Memo, they will continue to be treated as such for the remainder of the accounting cycle. For example, if you’re integrated with QuickBooks, consignment and memo items can be mapped to special income and cost-of-good-sold accounts so that you may manage them differently from regular stock items.
Consignment items and Memo items are similar to each other in that both are liabilities while in your possession. Also, they will both generate a payment due after being sold, which is expressed by setting a payable date on the item record.
They differ in that Memo items are owned by a vendor and Consignment items are owned by a customer. Therefore, how you pay for these items will have a different process. For Consignment items, there is a system option to automatically generate a credit memo to the owner when the item is sold. Memo items are paid for, albeit after the sale, like any other inventory bill when they become payable and is handled outside The Edge.
For the purposes of reporting, Consignment and Memo items are not considered part of stock until the item is sold and a payable is attached to the record.
Consignment and Memo sales follow this general process:
- Item intake, where you indicate the type of item you have
- Sell the item to a customer
- Pay the owner or vendor.