Consignment Sales

There are two types of consignment sales for Vehicles, Consignment (Agent Sales) and Consignment (Purchase on Sale), which of these you use depends on the agreement you have with the vehicles owner. In general with Agent Sales the dealership receives either a flat rate or percentage commission, while with Purchase on Sale there is an agreed purchase price in advance and the dealership keeps the profit. You'll have to decide which type of consignment you should use, and can check the full details on which type applies to your situation with the ATO. 

Agent Sale

This is usually the more common arrangement we find in dealerships. This sale type acts differently to a regular sale in that it won't put the vehicle purchase into creditors until after the sale has been processed, and the sale will post only the commission amount to income and claim the gst on that amount.

When adding the stock in Eclipse you'll set the status to "Consign (Agent Sale)". 

Once you're ready to sell the vehicle you'll have to come in and set the purchase price based on the commission you will receive. The commission is calculated based on the sale price - purchase price.

For example if we had sold the consignment for $21,000 and had a $1000 commission fee, the purchase price would get set to $20,000. Once that is set you can go into sell the vehicle. Once the vehicle is delivered it will post a journal for the commission received by the dealership. When selling the vehicle it will check with you if the purchase price is correct. Once the sale is delivered this will leave you with an amount owed to the vehicle owner in Creditors for the purchase price, and an amount owed to you from the customer in Debtors. 

Commission calculates based off Sale price, not the Total due on delivery field so if setting total due on delivery, any additional fees will reduce the amount of commission that is posted.

The sale of the vehicle is marked GST Exempt but the commission journal when it posts will claim the GST collected as part of the commission. 

Simplified Steps

1. Add Vehicle, set to Consign(Agent Sale) status

2. When ready to sell vehicle, set the purchase price based on sale price - commission. (e.g. $21,000 sale, $1,000 commission = $20,000 purchase price)

3. Sell and deliver vehicle as normal

Common issues:

Amount owing to customer is incorrect.

-    If you undeliver a consignment it doesn't unpost the commission, so the commission will still be there as a journal. When redelivering it will ask if you want to repost the commission, if the commission amount is the same then you can press No, if it's changed and you press Yes or accidentally press Yes then you'll have to go into the Journal List and find the commission journal and remove the incorrect/duplicate journal. 

Here's an example of the commission being incorrect when posting, had posted as $151.6 commission instead of $1000. 

In this case we would delete the journals with reference 1442 and 1443.

Purchase on Sale

With purchase on sale vehicles you will usually know the agreed purchase price when you get the vehicle so you can enter that straight away. These can be treated more similarly to a regular vehicle the main difference will be that the purchase from the owner doesn't go into creditors until the vehicle has been sold. Once it is sold it claim the GST on the purchase and sale like a regular sale does.

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