We set up the consignment warehouse and transfer the item to that warehouse for our house keeping purpose. And once we sell it, we will create the sales order by issuing the inventories under that consignment warehouse.

Thank you @kchan15  that is helpful to consider. 

Hi Guys, 

Just following up on consigned workflows. We have a client who drops ships stock from the vendor to the customer. They bill the customer when the stock is used up by the customer. Any suggestions or pointers on how to manage consigned workflow when goods are drop shipped to the customer warehouse? 

Thank you. 

We do a lot of consignment and it can be difficult to manage.  In a normal case we will sell the customer goods, during this sale the correct GL accounts are updated.  Once the sale is complete we receive the goods back in through an adjustment code.  This will setup the liability with an contra account so it has no affect on the books.  We then assign the products to customer warehouse.  We have a posting class setup using the warehouse.  When the good are purchased they reduce the liabiltiy and contra accordingly with not hitting a sales account.  This makes sure we are not overstating income.  

Our business is promotional goods.  Companies buy the good, we put the goods on a platform for employees to purchase.  We fulfill and ship items out of our warehouse.  

This method allows us to do cycle counting, have a value of customer items and assign warehouse locations.  

I have looked at doing a separate branch, and consolidating financials.  The method works, however there is more room for errors and shipping is not the easiest when using ACU shipping.  

How this helps and I am always looking for better ways to consignment.  If you drop ship from a vendor to customer and bill when they use it, this method will still work with the ability to track inventory.  

Maybe this will help to find a solution for your purposes?

https://www.acumatica.com/blog/how-to-implement-consigned-inventory-part-1/

https://www.acumatica.com/blog/how-to-implement-consigned-inventory-part-2/