Reconditioning expenses incurred after the sale date of the stock item can be allocated as either additional reconditioning that will affect the profit of the sale, or warranty that will not. These items can be handled differently in Dealerlogic Accounting depending on how you want them to affect the sale of the stock item. You must decide how each item is to be handled and take the following steps accordingly.
A Warranty item is something that was not anticipated as a cost during the sales process. It is something that has arisen after the customer has taken delivery of the stock item. It should not affect the original Profit recorded on the sale. From the stock card go to the Reconditioning tab and add the item in the normal way, ticking the Warranty box, OR From the stock card go to the Warranty tab and add the item in the normal way - the Warranty box will already be ticked for you, OR Create a Reconditioning Purchase transaction selecting the correct stock card and tick the Warranty box. |
Items marked as Warranty do not form part of the Cost of Sale. The expense will not be taken up in the Sales Journal, but will be posted directly to the linked Warranty account. See Account Settings. You may direct these expenses to a Cost of Sale account, or if you maintain a Warranty Provision liability account, then choose this as your linked Warranty account. |
There will be many circumstances in which reconditioning expenses that legitimately belong with the sale of the stock item are processed after the sale date. Dealerlogic does not assume these items should be treated any differently to the stock item pre-sale simply because the stock item they are being applied to is sold. Often reconditioning invoices arrive after the sale is processed although the work involved occurred prior to delivery of the vehicle. Apply these invoices as Reconditioning items to the stock card in the normal way. |
After Sales Reconditioning in the Accounts
Reconditioning items added prior to the sale date are allocated first to the Reconditioning asset account, and the Sale Journal moves them from there to the Cost of Sales - Recon (or Rego) Purchases account. After Sales Recon is treated differently. The purchase is first applied to the Recon After Sales asset account and the Sale Journal moves them from there to the Cost of Sales - Recon (or Rego) Purchases account. This is because expenses applied after the sale date would be Credited to (taken out of) the Asset account by the Sale Journal BEFORE the purchase Debits (puts into) that account. If all Recon went to the same account, reconciling to the end of a period would be difficult. Note: The Recon After Sale asset account is therefore normally in Credit (negative balance) but debits subsequently applied will clear out credit amounts. Should the balance appear to be increasing over time, your account settings may be incorrect. |
Because Reconditioning applied after the sale date will cause the Sale Journal to re-save with new Cost of Sale amounts, previously reported figures may change. Use your judgment here, if an invoice is dated days after the Sale then it should be applied to the sale, however if it is dated weeks or months after the Sale then it is not prudent to allow such historical figures to be altered. By locking a date range transactions dated prior a date are prevented. Similarly once a Financial Year has been rolled, no further transactions can be entered for that date range. If an invoice is received that applies to a stock item with a sale date within a locked date range (even though the invoice may have a current date) either enter the invoice as Warranty, or apply it to a different stock item. |