How to sell Special items as over the Counter Sales
Over the Counter Sales of Special items
The setup of “Special Items” within the DealerVu Part Inventory and resulting control in the general ledger accounting is accomplished with a Special Part Group. Good examples of special items are: a) Storage Fees, b)Re-stocking Charges, c) Rental Fees & d) Gift Certificates.
Set Up New General Ledger Account:
Accounting > Chart of Accounts insert and create a new account, “Accrued – Gift Certificates” This account will be numbered to fit in the “Other. Current asset area subject to the numbering of your COA. If this were an income account you would want to structure it in the Income (Sales) area of your Chart of Accounts.
Alternate Method for Storage Fees: Most “Special” items do not have a direct cost associated with them. An alternate method for Storage Fees would be to create a Labor Item for storage so you can track the labor hours associated with the storage process in the technician efficiency analysis report. Go to System Settings \Labor \ General Info. Select the New Labor Icon, and insert appropriate info. Here your COGS will be technician wages. The cost value is the assigned cost/actual hour applied to the task and the Estimated Hours value is the default value for hours that will be assigned to the Actual Hours on the Service Order.
Set Up a Special Part Group:
Open System settings \ Parts \ Parts Category and set up Parts Category “Gift Cert” and the Sub category “Gift Cert”
Open System settings \ Parts \ Parts Groups and set up the Parts group “Z-Gift Certificate” and insert the part category “Gift Cert”
Part Groups are designed to establish inventory groupings (i.e. Parts versus General Merchandise). There are fields on each part group for Sale and Cost of Goods Sold GL accounts. The GL posting rules look at the Part Group sale and cost of goods sold fields to see if they contain governing GL accounts. Normally you would leave these two GL account fields blank so that the GL accounts are governed by the hierarchy established in DealerVu for part sale and cost of sale accounting. However, in the case of ‘special items,’ you will intentionally create a special item part group and assign GL accounts in the Sale and Cost of Goods Sold GL account fields. When those GL account fields are not empty (contain a valid GL account #) those accounts will control the GL accounting of any item sold that is a member of that part group. Consequently, we can use this functionality to ‘override’ transaction type and category accounting that normally occurs on part and service order invoices.
If the Sales GL Account field has a value, the Cost of Goods Sold account field cannot be empty. In many cases there will be no cost of sale to the item being sold (i.e. storage or rental is a fee charged without a direct ‘cost’ associated to that fee). So you need to give the Cost of Goods Sold (CGS GL Account) field the same GL account used in the Sales field. This thinking also applies to Gift Certificates that actually need to post a credit to the accrued liability account noted at the beginning. The Sales and Cost of Goods Sold GL accounts should both contain the GL account for the Gift Certificate accrual.
You will note in the example that we prefixed the name of our “Special Parts Group” with a character that forces the special item to the bottom of the Part Group selection list. This controls the sort order of the list whenever it is presented to a user, reducing the potential of a selection error for a valid inventory part. As a suggestion, a prefix plus name such as ‘Z-Storage’.
Create a Special Item in the Parts Inventory:
- Go to Part Sales and Management \ Part Inventory and select the New Part icon
- Give the item a part# that represents the item: “GIFTCERT “or “GC”?
- Put in a description
- Assign a vendor in the vendor field – you can use a store internal vendor account if one exists
- Assign the special part group in the Part Group field
- Open the Category Tab and insert one Main Category line item for “Gift Cert”
- If you want a default ‘Price’ for the item, click on the Pricing Tab and enter the value in the Standard Price field
- Deselect any inappropriate checkboxes like “Taxable” and “Print Price Sticker”
- Save and exit.
Selling a Special Item:
Place the part created in Set-Up above on a Parts or Service Invoice. When it has been marked paid or charged on account, it will credit the gift certificate liability account, created in Set-Up above, and debit either cash on hand or accounts receivable. Make sure no tax is charged. The example represents a sale for cash. The price was allowed to be variable so it was manually set in the Price box on the Part Item Line. No tax is charged because the part is created as non-taxable.
Press “Ctrl+H” to see the journal entry that is created by the transaction. It credited the Accrued Gift Certificates account because it increased the dealer liability for goods and services that have not been delivered.
Redeeming Gift Certificates:
When a Gift Certificate is redeemed, it is to be added to the Payment tab of the invoice or the service order, as payment method “Gift Certificate”. The customer offering the Gift Certificate payment should be listed as the purchaser and therefore create a customer account credit for any unused portion of the certificate. Otherwise, you may be liable for refunding cash for these unused balances. The following is a simple transaction. The Customer advises he is paying with a gift certificate so we acquire his name and insert the item(s) being purchased.
It appears he will be expecting $23.88 change from his $25.00 gift certificate. We handle the transaction by choosing the Payment Tab, selecting Gift Certificate, and inserting the Face Amount of the certificate.
This will result in an amount due the customer so we select another payment, this time “Account Credit” and it automatically calculates the amount remaining. When the invoice is Saved (paid) the customers account will now have a credit for the remaining balance.
Opening the customers Record and selecting "Account Tab\ Credit Transactions", shows a balance of $23.88 which he can use at any future visit anywhere in the dealership. If the customer had actually exceeded the gift certificate balance then a second payment type could be inserted for his additional remittance.
Moving to Daily Book we see the Payment Summary shows a $25.00 Gift Certificate was remitted in payment (further down note the credit transaction increase for the customer). When counting the Gift Certificate, add it to cash received at the drawer level.
The payment summary shows the amount redeemed in Gift Certificates. Do a journal entry to credit Cash On Hand and debit the Gift Certificate Liability account, as created in Set-Up above. This will decrease your cash on hand (since you did not actually receive cash when the Gift Certificate was redeemed) and decrease your gift certificate liability account.