Concession Processing

Created by Migration Bot, Modified on Fri, 23 Oct at 11:31 AM by Migration Bot

Originally written by Will Miller, last updated Mar 15, 2022, on the Swan Retail knowledge base (SRS).

How to configure and operator a concession operation when using Swan system as the vehicle for processing and recording concession sales.

Concessions Definition

A concession is a business operated within the space of another store to sell their branded goods within the store.

For this document the concession is the third party selling goods within the retail space managed by Swan Retail.

There are two types of concession

The concession simply occupies the space within the store and supplies all the services, POS devices and staff to sell their products. They rent the space from the store and / or pay a percentage of their takings to the store, but aside from this they are completely independent.

This type of concession is not managed by Swan and must be operated outside of the system.

The concession supplies the merchandise and promotional materials but not the sales staff or the POS devices – these are provided by the store.

When the concession’s goods are sold via the stores equipment Swan can be configured to record such sales and raise ‘self-billing’ invoices for services / rent to the concession.

For Swan to operator the following occurs

The concession decides exactly what products are sold and (generally) at what prices.

The concession supplies the merchandise based their own criteria - sales, promotions, new lines etc.

The merchandise it is NOT ordered by the store.

The concession supplies the store with a list of items (Descriptions, bar codes, prices etc.) which are entered / imported into Swan.

The Swan import programs allow a template to be set up to cater for individual concession import files. (Import Header / Detail Mapping)

The concession frequently resends the list of Items with updated prices.

The items are almost always source bar coded.

The store sells the items and takes the money though the tills.

Each week the store

Calculates the total sales value of the items sold for the concession
Works out a commission due - based on a set percentage of the sales value
Deducts the commission from the total sales value
Deducts any expenses incurred from the balance
Pays the final balance to the concession.

The store does NOT account for the VAT on the concession items sold – they do not form part of the store VAT Return.

The commission charged by the store to the concession does include VAT

The sales for concession Items do not carry a cost and are analysed separately from the store ‘own bought’ items, because they do not carry a traditional margin – i.e. sales less cost. The true margin of the concession items as far as the store is concerned, is the commission earned.

Configuration

To configure Swan to operate with concessions the following is required.

Concessions Maintenance

Create a concession record for each concession in operation.

A Concession Code should be created for each concession and where appropriate linked to the supplier providing the goods.

The Nominal Code and Commission Account are the accounts that are posted to when commission is calculated by the system.

The VAT rate is that used to calculate the VAT element of the commission charged to the supplier.

Concession Expense Maintenance

This program enables the construction of ‘standard’ expenses to be added to a concession statement. For example; If the concession is charged a monthly service or staffing levee, these expenses can be created within this program and will as such automatically attach to the statement for value addition.

Items

Having created the concession code, it is necessary to link all items sold on behalf of the concession to the concession code. This can be done in several ways; importing items, maintaining items for example.

When viewing the stock item, the concession code is displayed in the lower right section of the screen, as indicated below –

The concession control is maintained via the Style Maintenance program.

A concession item is usually a Non Stock item – however some stores have their concessions set up as Unit items. This because they like to know what stock they have in store.

Concession items should always be assigned to a discreet Department / Section / Sub Section, so the can be reported on separately. (Hierarchy Maintenance)

The VAT code should always be a ‘zero rate’ code

The cost price must always be zero, whether Non Stock or Unit.

Operation

Daily

Each day (usually) the store sends details of the concession items sold to the individual concessions this is either in the form of a report set to run and be sent automatically from Swan or by sending the sold item tickets to the concession - as collected when each item is sold.

The sales returns from the store allow the concession to decide what items need to be re-stocked.

Where a store has concession items set up as Unit items then the store needs to record when items are received from the concession. This is preferably done using Stock Adjustments as Goods Receiving will leave unmatched GRN’s on the system unless there are matched against a zero value invoice.

Weekly

Usually each week the store calculates the monies owed to the concession as-

The Sales Value of the items sold less the Commission calculated on Sales Value

less any agreed expenses incurred by the Store

Once calculated the store sends a statement to the concession and posts an invoice against the supplier.

This invoice contains VAT calculated on the commission and any VAT calculated on the agreed expenses.

Statements

The statement and invoice can be calculated / posted manually or (preferably) using the Swan Concession Invoicing program as below.

The screen is populated by selecting the Concession, selecting the Cost Centre, entering the reference, entering the Start and End Dates and pressing the Import action button.

The data grid lines load automatically showing the payment due to the concession for sales processed during the processing period, the commission calculated on the sales, with the remaining grid lines loading from the Concessions Expense Maintenance data.

Values in the ‘expenses’ lines require manual specification.

Any expense not being charged should be removed from the grid.

The values in the top right are values of the Invoice to be posted against the supplier (Concession).

The VAT looks odd because there is no VAT calculated on the sales but there is VAT calculated on the commission and expenses charged to the concession by the store.

There is currently an issue with having the concession items set up with a zero rate VAT Code in that the tills also have the items set up as zero rated and therefore cannot print a VAT receipts is the customer wants one.

Once processed the program generates a concessions invoice and posts to the specified account codes, producing an audit like that shown below –