We will be having consignment inventory from an international vendor in our building and that inventory needs to be available to Ship/Sales Invoice each day. However, as it's consignment, it should not be on our balance sheet as inventory until sold (then going through COGS). After the inventory is sold, we will give the vendor the information on quantities and they will invoice us for a predetermined unit price (from PO) and the quantity that is no longer there.
I've seen in other forums to setup an inventory location with a separate posting setup and create a consignment inventory account with interim account to net to $0 in total. That would infer that we would receive the PO from the vendor with the inventory, then as we ship it, Recognize the COGS without having any net inventory on the balance sheet. That makes sense. As we ship, we would monthly inform the vendor the quantities and enter an invoice against the inventory used.
The problem i foresee is that we cannot invoice from receipted lines only partial quantities we originally received in the consignment receipt.
I should also mention, we'll need these inventory quantities to accurately reflect those PO unit prices (which we will know at the start), but also include some item charges (tariffs) that we will want assigned to those inventories (even though it's not our inventory)
Anyone come up with a solution to a similar situation?
