Consignment Sales With JAYA123
How do you handle consignment sales with JAYA123?
JAYA123 takes a “simplistic” approach to everything, just like PUB123 did before it…. and it’s been a successful paradigm for us… and our large client base. Our “solution” may not be “accountingly correct” (to coin a phrase) but it WORKS… and that’s the important thing… to have procuedures that you understand and that reflect “real life.” So keep that in mind as you read below.
We handle a consignment no differently than a sale-by-PO. When you come down to it there really is NO difference…. it’s a sale that you have not been paid for. (And even when you get a PO from Ingram or Baker & Taylor… in reality it’s a consignment sale since they can (and will!!) return merchandise.)
So there are no special procedures for consignment sales in JAYA. You enter the order just like one that you got paid for…. except that you don’t enter a payment (obviously)…. which is no different than entering a sale in which you got a PO and which you will bill for.
As the money comes in, you just apply payments to the order (JAYA lets you have unlimited number of payment records for each order.) If you get returns which “closes out” the order, you can go back into the order and modify to reflect the number of items actually sold… and that’s that.
When they order again, you start a new order.
The only problem that arises is when a company like Ingram will order 10 copies of Gone With The Breeze on Tuesday to one location and then orders 50 copies of the same item on Friday to a different location. Fine, you have two orders. But what happens six weeks from now when you get 8 copies back? You don’t know what order it was from… the Tuesday order or the Friday order?
There are no rules here. People do it in different ways. Some will apply the returns to the first order if it has not been paid yet. If so, they apply it to the second order. It all depends on how and when Ingram pays you… and fortunately they will list the the Invoice numbers (yours) that they are paying on. Thus, some folks will create a third “order” that keeps a negative balance to reflect returns… but we don’t think this is a such a good idea. We think JAYA works better if it is “in sync” with “real life” and that the invoices should match what you finally get paid.
We see no real harm in going back and changing an invoice. Yes, it breaks all of the rules of accounting “audit trails” but the purpose of your system is to help YOU, not to conform to some set of rules that make your life difficult. A year from now you are going to want to know how many books Ingram BOUGHT AND PAID FOR, not how many were shipped… and by keeping the orders “in sync” with what you actually receive for them, you can accurately report your income and have an accurate picutre of your standing with Ingram or any similar entity.
Now you ask, what about royalties. Well you have a point. This is when we suggest the alternative procedure where you create a new “invoice” and use the “Return” CATAGORY and enter a detail line for the item and qty of what you got back, and then enter a “payment” for it. The JAYA123 royalty system will “back out” all returns from the final royalty total.