Consignment Stock Tracking
Consignment stock sits in your warehouse or on your shelf but legally belongs to the vendor until it's used or sold, which means it has to be tracked separately from owned inventory for both physical counts and financial reporting — and in practice it usually isn't, because most inventory systems treat everything on the shelf the same way unless someone builds a separate process for it. Consignment units get counted into owned inventory value, usage triggers a billing obligation to the vendor that nobody reconciles against actual consumption, and at reconciliation time — often only during an annual audit — the gap between what the vendor's records say and what your system says has grown large enough to be a real dispute, not a rounding difference.
STARTING PRICE
From €299
Standard tier · Multi-step workflow with AI extraction/decisioning and 2-3 integrations.
Get a quote →Saves roughly 3-5 hrs/week for a purchasing or inventory accounting team.
How the automation works
We track consignment stock as a distinct inventory category from the moment it's received, tagged by vendor and agreement terms, and separate from owned stock in both physical location tracking and valuation reporting so it never gets counted into owned inventory value by mistake. Usage or sale of a consignment unit triggers the corresponding billing event to the vendor automatically, matched against the agreed unit price and terms, instead of relying on a periodic manual reconciliation to catch what was consumed. A running reconciliation compares your consumption record against the vendor's own invoice or statement when they arrive, flagging any mismatch immediately rather than letting it accumulate toward an uncomfortable audit-time surprise.
Process flow
- 01
Consignment stock received trigger
Consignment inventory is received and tagged as vendor-owned with the specific agreement and unit terms attached, separate from the standard receiving flow for owned stock.
- 02
Track separately from owned stock integration
Consignment units are tracked by location and quantity as a distinct category, excluded from owned inventory valuation and standard stock reports.
- 03
Usage or sale event trigger
When a consignment unit is used in production or sold, the consumption event is captured and matched against the vendor agreement terms.
- 04
Generate billing obligation ai
Consumption automatically generates the corresponding billing obligation to the vendor at the agreed unit price, rather than waiting for a periodic manual tally.
- 05
Reconcile against vendor statement ai
When the vendor's own invoice or usage statement arrives, it's compared against your consumption record, flagging any mismatch in quantity or price immediately.
- 06
Report consignment position output
A running consignment position report shows current on-hand consignment stock by vendor, usage since last statement, and any unresolved reconciliation discrepancy.
Inputs
- Consignment agreement terms per vendor
- Receiving records for consignment shipments
- Usage and sale transaction data
- Vendor consignment invoices or usage statements
Outputs
- Consignment stock position by vendor and location
- Generated billing obligation per usage event
- Reconciliation report against vendor statements
- Discrepancy flag on quantity or price mismatch
Works with
Prefer a fully custom build instead of an off-the-shelf integration? We scope both options during your free consultation — most jobs like this one work fine on standard connectors, but higher-volume or non-standard systems sometimes need bespoke API work, reflected in the complex tier.
Where this goes wrong if you get it wrong
- Consignment stock left untagged and mixed with owned inventory in physical counts and valuation reports overstates owned inventory value on the balance sheet and understates the liability to the vendor — the separation needs to happen at receiving, not retrofitted at reconciliation time.
- Relying on a periodic manual tally to report consumption to the vendor instead of triggering billing at the point of actual usage creates a lag where the vendor's records and yours diverge for weeks, making the eventual reconciliation harder and the numbers less trustworthy on both sides.
- A vendor's consignment agreement terms sometimes change (a price update, a new minimum consumption commitment) without that change getting reflected in the system's billing logic, so usage keeps getting billed at stale terms until someone happens to notice the vendor's invoice doesn't match.
- Consignment stock returned to the vendor unused — because it expired, was discontinued, or simply wasn't needed — needs its own tracked event distinct from a sale or consumption, or the position report will keep showing stock as on-hand that's physically already gone back to the vendor.
Frequently asked questions
Does consignment stock get counted in our owned inventory valuation?
No — it's tracked as a distinct category from receiving onward, excluded from owned inventory value and reported separately by vendor.
How is the vendor billed for consignment usage?
A billing obligation generates automatically at the point of usage or sale, matched to the agreed unit price in the vendor's consignment terms, rather than accumulated for a periodic manual bill.
What happens when our records and the vendor's statement don't match?
The mismatch is flagged immediately with the specific quantity or price discrepancy, so it can be resolved close to when it happened instead of surfacing as a larger gap at audit time.
Does this handle consignment stock returned to the vendor unused?
Yes — a return is tracked as its own event distinct from consumption, so the position report accurately reflects that the stock has left your location without it being billed as usage.