To settle with a consignor means to pay them the amount owed for their share of sales proceeds. An essential feature of consignment software is the automation of this process, making it quick and easy to calculate amounts due, add bonuses, deduct fees, and make disbursements.
Understanding Consignment Settlement Records
Each time a consignment sale is completed, a 'settlement document' is prepared automatically. This means that the software has recorded the sale and credited both the consignor's account and the shop's account for their respective shares of the sales proceeds.
A separate record exists for every consignor who has sold items and has not yet been paid. Settlements can be processed individually or in batches, grouped by method of payment. For example, all consignors to be paid by check can be processed as a group (batch settlement).
The Consignment Settlement Process
Settling with one consignor at a time allows for adjustments for bonuses and fees. For instance, a bonus might be awarded for accepting store credit as payment. With Best Consignment Software, this bonus can be based on either the amount of the sale or the consignor's share.
Fees may be deducted for cleaning, repairs, shipping/delivery, etc. An advanced feature of BCSS is the ability to automatically deduct set fees, such as a percentage for sales paid by credit card.
Key Features of Best Consignment Software
- Payment splitting between cash, store credit, check, and gift certificates.
- Editing of completed settlements for adjustments in date, additions, deductions, and notes.
- Settlement processing for one or more items but not all items.
- Inclusion of layaways in settlements.
- Printing of settlements with settled items listed, allowing for two settlements per page.
- Correction or voiding of incorrect settlements.
- User-defined fees that can be deducted automatically.
Settlement Timing Explained
An 'aged batch settlement' refers to settlements for prior months, while a regular settlement pertains to the current month.
Settling with Consignors for Store Credit
Conventional consignment software typically provides payment options of cash, check, or gift certificates. However, settling with consignors for store credit offers several advantages:
- Sales proceeds remain 'in house' for future purchases.
- Convenient tracking of amounts outstanding.
- Reduction in paperwork.
- Less cash required on hand for settlements.
- Avoidance of check writing and distribution.
- Less administrative complexity related to gift certificates.
- Adding professionalism by managing compensation options effectively.
Store-Credit Bonus Incentives
While people often prefer cash in hand, store credit can offer a greater sense of loyalty and trust when managed well. Sellers may be willing to accept store credit instead of cash if incentivized with a bonus yielding a greater settlement amount.
Dynamic Software Options for Settlements
Best Consignment Software includes a feature to add an additional amount to settlements for payment made via store credit. The bonus, expressed as a percentage, is configurable in the program's settings. When store credit is selected as the payment method, the program automatically adds the bonus amount.
A dynamic option in BCSS allows stores to base the bonus on either total sales or the settlement amount, offering flexibility in how incentives are structured.
For example, if the consignor's percentage for cash settlement is 50%, their share of $100 in sales proceeds would be $50. However, a 10% bonus for store credit could translate to either $10 (if based on total sales) or $5 (based on the settlement amount).