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this is Seth David for this leader group bringing to you a very special screencast this time we're talking about how to handle consignment goods in QuickBooks give us a call for information about memberships and resources at eight eight eight four eight four five four eight four when you are the consign II there's a few things you're going to have to do in order to set this up which includes the creation of a couple of new accounts which likely are not already included on your set of books so what I always like to do when I'm changing around anything having to do with account so I like to come right into my chart of accounts here I'll go to lists I'll go to chart of accounts and we need to create a couple of accounts here so the first thing we need to do is create a new account control on the letter n is a new will help me do that and I need an other current liability so down here in the drop down I'll find that choice other current liability click continue and the name of this first account that we're going to create is called consignment sales liability click Save and close and we have another new account to create so again I'm going to say ctrl n is a new and this time I need an income account and we'll click continue and this one is going to be called Commission income now the assumption here is that we're going to get paid 25% of whatever sales we make so whatever we sell things for we get 25% of the gross and the difference has to be paid back to the consignor so that's why we need a commission income account pickup there are our share of the income okay now we're going to need to create a couple of items so let me close all the windows and let's go to lists an item list and we're going to create a new service item ctrl n is in new again service item and we're gonna call this reduce liability for Commission and we're going to link this to the consignment sales liability account okay so again we're calling this reduced liability for Commission and we're linking it to the consignment sales liability account and also the rate should be minus 25% you can do it as a percentage QuickBooks will understand what you're trying to do so that way reduces the liability and takes it out of what we owe the consignor when we've made the sale and then of course we're gonna have to put that in to income into our Commission income so now we're going to create another service item new control n service item and this one is going to be called Commission or Commission come and this one's going to be a positive 25% and of course the account is going to be Commission income click OK simple simple simple now we're going to create another new inventory item control M and this one is going to be an inventory part and it's going to be called held on consignment and essentially this is going to become a way of grouping all the items that we're holding on consignment for others so every one of these is going to get the regular cost of goods sold account assigned as the cost of goods sold account the income account however is not going to be an income account at all it's going to be that consignment sales liability account that we had created so it's a little unusual normally you'd put an income account here but we are simply making the choice to put a liability account there and you'll see why this will all come together by the end it's like one of those mystery movies where you don't understand the plot until the very end so we click OK and now I can create new items all right can actually well it's too late now I could have hit next but control-m and we'll create another inventory part we'll call this a sub item of held on consignment all right and so we'll set up a as a good held on consignment same thing goes here consignment sales liability and then we are good to go okay let's create one more let's see that again new item inventory port will set up item B over here consignment sales liability and we are all done and we'll click OK now what we need to do oops I forgot to make that a sub item so we'll edit the item sub item of held on consignment click OK now we got it in the right place now we need to create a group for each of these items that might be held on consignment so we're going to say new group group name would be sale of item or let's just call it widget a okay and over here it's going to consist of three things one is going to be the item a I can just hit a and it comes right up and we'll put a quantity of one on there the second one is going to be the Commission income and the third one is going to be the reduced liability for Commission income right neither one of these get quantities because they're based on percentages so we can create this group will click I'll say next and we'll say sale of widget B then over here it's B and it's going to be Commission income and reduce liability for Commission so now I've got my groups created you