How to Track Consigned Inventory in QuickBooks

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Businesses use QuickBooks, financial management software created by Intuit, to cover a range of comprehensive tasks ranging from filing taxes to managing product inventory obtained from distributors. You can also manage consigned inventory in QuickBooks. Consigned inventory is sold under a consignment agreement in which a person or business provides goods to a retailer but isn't paid until the goods sell. The retailer resells the goods and returns a percentage of the profits to the person or business. If multiple agreements exist, managing inventory can become complicated. Create separate profiles for each consignment agreement to streamline your inventory information.

Launch QuickBooks. Click on the name of your company on the splash page and then click "Open."

Turn on inventory tracking by clicking the "Edit" menu. Click "Preferences." Click "Items & Inventory" in the left menu pane of the Preferences window. Click the "Company Preferences" tab. On the Company Preferences tab, select the "Inventory and purchase orders are active" checkbox.

Select the "Company" icon in the main task bar, then click "Items & Services." Select "Item" then click "New." Click the "Type" drop-down list and click "Inventory Part." Enter the name of the item you plan to sell on consignment. If a purchase order number is available, enter it into the Inventory Part form.

Fill in the Purchase Information fields. On each item, enter the name of the vendor providing the consigned items, the expected sales price, the Cost of Goods Sold account and the appropriate tax line for the transaction. The tax line you use should correspond to the tax lines of your standard inventory. Select "Consignment Sales" as your income account and "Inventory on Consignment" as your asset account.

Click "OK" to record the item or "Next" to save the item and begin another consignment item.

Tips & Warnings

  • For high-volume consigned inventory sales, create a single non-inventory part item instead of "Inventory Part" on the Items & Services menu.

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