In response to the numerous questions we receive on accounting related questions, we've included many answers here - in one easy place.

Keep in mind, we are not accountants. Please share this page with your accountant or bookkeeper for a complete picture on financial and tax reporting requirements*.

1. Basic accounting overview.
2. What accounting work does ConsignPro do for me?
3. What information do I need to maintain outside of ConsignPro?
4. How does ConsignPro interface with QuickBooks?
5. How does ConsignPro interface with Quicken?
6. What do I need to do at year-end?
7. How do I find my state sales taxes collected and owed?
8. How do I balance my checkbook with ConsignPro?
9. Do I need to buy QuickBooks or Quicken?
10. How is my Inventory Expense (cost of goods sold) calculated?

1.  Basic Accounting overview

First a quick (and admittedly simplistic) overview of store accounting:

Store Profits = Sales - Discounts - Cost of goods sold - other expenses

ConsignPro tracks everything except "other expenses". This is described next in detail.

2. What accounting work does ConsignPro do for me?

ConsignPro keeps track of all money (sales) coming into your store (assuming you use our Make Sale screen to make sales).  These revenues are tracked on our "Sales Activity Report" and in the Revenues section of the "Income Statement".  Both reports can be found on the Reports page and run for any period of time you select. These are the two most accurate reports for tracking Sales income.

Discounts you take on sales (on the Amount Due screen, Discount box) are an expense to the store and should be subtracted from your Gross Sales figure  when determining your total revenues (i.e. net sales).   Discounts are shown on the "Income Statement" on the Reports page.

ConsignPro keeps track of the state sales taxes you collect on the sales you make with ConsignPro (for Canadian users we track both Federal and PST taxes).  Sales taxes collected are also shown on the "Sales Activity Report" (detail) and on the "Income Statement" (summary).  It is important to note that the amount of sales tax you collect may be different (due to rounding on individual sales) than the sales tax you actually owe to the state. We suggest taking your net sales figure and multiplying that by your state tax percentage to calculate your true obligation to the state you do business in.  An accountant can help you use our "Sales Activity Report" to determine this figure.

ConsignPro tracks your cost of goods sold.   This includes both the money you owe (or may have paid) to consignors for the sales you make AND the cost of selling store owned inventory.  These costs are calculated and recorded when the item is SOLD (paying the consignor does not matter in this calculation).  The cost of selling consigned and "vendor" items is simply the final sales price times the split percentage on the item when it is sold (i.e. the amount the consignor receives for the item).  The cost of selling store owned items is the "Store Cost" that is entered on the Add Inventory screen when the item is added to the database.  The "Inventory Expense" is shown on the "Income Statement".  This number includes the cost of selling consigned, vendor, and store owned items.

3. What information do I need to maintain outside of ConsignPro?

ConsignPro typically only tracks the revenue you make on items that you sell using our program.  If you receive revenues from other sources (i.e. delivery, tanning beds, special services, etc.) you'll need to track and account for these revenues outside of ConsignPro and report them at tax time to your accountant or bookkeeper.

ConsignPro does not track store expenses -- other than the cost of the inventory you sell (as described above).  Some on-going expenses that you might also have include payroll, rent, utilities, supplies, equipment, bank fees, licenses, memberships, professional services, and inventory you don't track in ConsignPro. There, of course, may be other expenses you need to track as well.

Store owners typically use either paper, a spreadsheet program (like Microsoft Excel), Quicken, or QuickBooks to track these other items.   The method that you choose will depend on the complexity (and size) of your business, your familiarity with other programs, and the advice you receive from your accountant.

4. How does ConsignPro interface with QuickBooks?

Sales

The QuickBooks interface built into ConsignPro can send information to a small export file which can the be "imported" into QuickBooks (any version made after 1998).  ConsignPro summarizes sales data (by month) and passes this summarized data (in five categories) to accounts you setup in QuickBooks.   The five accounts that we update are: sales, discounts on sales, state taxes collected, inventory expense, and retained earnings (profits).  Before you use our QuickBooks interface, you need to setup the five accounts in QuickBooks.  You can name these accounts anything you'd like -- but be sure to write down the exact names so that you can enter these into ConsignPro.

Checks

The newest release of ConsignPro allows you to import consignor checks created from ConsignPro.  You can specify the name of your checking account in ConsignPro (which should match your checking account name you setup in QuickBooks).  ConsignPro will debit your checking account for each check transaction and credit an account called "Inventory" subcategory "Consigned".   If this expense category is not defined in QuickBooks, ConsignPro will create it for you automatically during the import.

To use either export feature in ConsignPro, click QuickBooks / "Export sales data" or "Export consignor checks" on the top of the Main Menu in ConsignPro.  If exporting SALES, click the "Accounts" tab and enter the account names that you created in QuickBooks. When done, return to the export tab and enter the dates for which you'd like to export data.   When complete, ConsignPro will create a small file on your harddrive (in the folder you specify) and give you the name of this file.  If exporting CHECKS, be sure to input the correct date range and your checking account name, and then click Export.   You can then "import" either export file into QuickBooks using the File / Import utility within QuickBooks.   More information on this process can be found under "QuickBooks" in the ConsignPro User Guide.

5. How does ConsignPro interface with Quicken?

ConsignPro sends individual consignor check data to Quicken (any version).  As you pay your consignors (using only our Print Checks feature on the Maintain Store screen), you have the ability to create a Quicken export file (using a simple checkbox).  The export file contains information about each consignor (name, number, amount, check number) who is receiving a check using this feature.  This small text file (exported to the directory you choose) can then be imported into your Quicken program to update your electronic checkbook.

Please make note of the file name and folder so that you can easily locate this file when you do the import in Quicken (File / File operations / Import).  Note that consignor payouts done to individual consignors using the "Payout Balance" button on the "Find Consignor" screen are NOT passed to the Quicken export file and would need to be recorded manually.

Additional information on the Quicken export utility can be found under the check printing section of our User Guide.  Information on importing data into Quicken can be found in the documentation that came with your copy of Quicken.

6. What do I need to do at year-end?

Visit our new "ConsignPro at Year end webpage".

7. How do I find my state sales taxes collected and owed?

To determine state sales taxes owed, you need to first determine the amount of gross taxable sales made in your store.  To do this, first run a "Sales Activity Report" on the Reports page for the time period you are concerned with (do NOT put a check in the Totals Only box).  Write down the GROSS SALES and DISCOUNTS totals from the last page of the report.  Next run the same report with the "Show tax exempt sales only" check box checked.  Write down the GROSS SALES total on the last page of this report.

Lastly, subtract both the tax exempt gross sales and discount numbers from the first gross sales number to find your total taxable sales.   This is the number you report to the state.  Lastly, multiply this number by your state tax rate.  This will give you the total tax obligation you owe your state for taxable sales made in that time period.

Note that the amount of sales taxes you collect and the amount of tax you owe the state may be different numbers (as we round figures on individual sales because you can't collect fractions of a cent).  The amount you collected throughout the year may be slightly higher or lower than this figure.  Consult your accountant for more information on determining your state tax obligation.

8. How do I balance my checkbook with ConsignPro?

Simply, you don't.  ConsignPro can write checks to your consignors using Quicken-compatible check stock in your printer, but we don't maintain a checkbook balance, record checking account deposits, or write checks for bills - other than for consignor payouts.

Your best bet is to use either a paper checkbook (and record the payouts you do in ConsignPro manually) or a check writing program like Quicken.   We can send your ConsignPro system payouts to Quicken using our Quicken export feature on the "Print Checks" screen.

You can "clear" checks in ConsignPro to record the date that the consignor cashed the check - assuming you created the check using ConsignPro.  You can clear checks using the "Tools / Post cleared checks" screen at the top of the Main Menu.  This will record the date that the consignor cashed the check on the "Account Activity" screen for each consignor who received a check.

9. Do I need to buy QuickBooks or Quicken?

Not necessarily.  ConsignPro has a number of reports on the reports page that can show you all the money coming into your store, your discounts on sales, cost of goods sold, sales taxes collected, and profits (using these categories).   Expenses not tracked in ConsignPro (see above) need to be tracked separately using any method that makes sense given the size and complexity of your store.  These include paper and other software (Quicken, QuickBooks, Peachtree, MYOBusiness, etc.).

If you are uncomfortable with small business accounting, we strongly suggest talking with either a bookkeeper or accountant in your area.

10. How is my Inventory Expense (cost of goods sold) calculated?

Consigned Items: The cost of selling a consigned item is calculated by multiplying the final selling price of the item times the split percentage that is on the item when it is sold.  This is usually the same amount that the consignor is paid for the item.

Vendor Items:  The cost of selling a consigned item is calculated by multiplying the final selling price of the item times the split percentage that is on the item when it is sold.  When you add a Vendor item to the database, you should set the split percent to reflect the cost of the item as a percentage of the Rack Price.  For example, if you paid $3 for an item that you are selling for $9, the split percent would be set to 33% ($3 divided by $9).

Store Items:  The cost of selling a store item is the amount in the "Store cost" field on the Add Inventory screen.   The cost of selling items that moved to the store account from consignor accounts when they expired is zero.

Inventory expense is recorded on financial statements when a sale is made in ConsignPro.  Inventory expense is deducted from financial statements when a void (or customer return) is done.

Visual Horizons Software LLC (and its creator Brian Wilson) are typically absolved of any liability associated with mistakes, omissions, or errors that may be in the ConsignPro program.  This release of liability is discussed in detail in the DISCLAIMER that you accepted when you installed ConsignPro. For particular wording of this disclaimer, please click "Help" / "Disclaimer" on the top of the ConsignPro Main Menu.