Difference between revisions of "How do I account for a unit written off?"

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{{Review}}{{Incomplete}}
 
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== Summary ==
 
== Summary ==
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This article will explain how to account for writing off a vehicle from {{VS}} and altering the values in the accounts.
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This article will explain how to account for writing off a unit from {{VS}} and altering the values in the accounts.
  
 
== More Information ==
 
== More Information ==
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As the summary states, there are two things to do in order to write off a vehicle from the system.
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{{Units}}
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As the summary states, there are two things to do in order to write off a unit from the system.
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=== Showing the unit as being Written Off ===
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You will need to show that the unit has been written off in the {{VS}} system.
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* Go to {{Menu|{{VS}}|Add or Edit Units}}.
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* On the {{DataPrompt|Search on:}} enter the unit in question and press {{KeyPress |Enter}} to list the unit.
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* Press {{KeyPress|F5}} or click {{Button|Edit}} to edit the unit.
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* Set the {{DataPrompt|Status:}} to {{DataValue|WRO}} (you may need to create a new code. If so make sure it is a non-stock status - see [[How do I create a unit status?]]).
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* Click on the {{Tab|Details}} tab and in the {{DataPrompt|Notes}} section enter in that the unit has been written off, when, how and if possible by whom.
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* Go to the {{Tab|Purchase}} tab and set the {{DataPrompt|Valuation Excluded?}} flag to {{DataValue|Yes}}.
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* Click {{Button|Done}} and {{Button|Accept}}.
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{{Warning|text=The system will immediately reverse the journal holding the unit in stock i.e. Credit Unit Stock Value (usually 70001/71001) and Debit Unit Accruals (usually Z940). If there are any expenses against the unit these will also be reversed to Credit Stock of Expenses (usually 70101/71101) and Debit Expense Accruals (usually Z944).}}
  
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=== Writing Off the Value of the Vehicle ===
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* You should now deal with the postings made to take the unit out of your stock.
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In order to reduce the value of stock, you will need to know the Nominal Centres for your {{DataValue|Stock Value}} and {{DataValue|Vehicle Write-Off}}.
 
  
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{{Tip|text=If you do not have a {{DataValue|Vehicle Write-Off}} centre, you will need to [[How do I Create a Nominal Code?|create one]] making sure that you set the {{DataPrompt|P/L indicator}} to {{DataValue|Cost of Sales}}. ''See : [[How do I Create a Nominal Code?]] for instructions to do this.''}}
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=== Writing Off the Value of the Unit ===
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Make sure you know the postings made so you understand which centres you need to Credit in order to Debit your Profit & Loss with the Write Off.
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* Use [[What does nominal review show me?|Nominal Review]] to view any postings made on today's date. You can enter the unit stock number into the {{DataPrompt|Filter on}} field to help you to find the postings made.
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* Make sure you have a {{DataValue|Unit Write-Off}} Nominal Centre.
  
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You will need to do a journal between these centres.
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{{Tip|text=If you do not have a {{DataValue|Unit Write-Off}} centre, you will need to [[How do I create a nominal code?|create one]] making sure that you set the {{DataPrompt|P/L indicator}} to {{DataValue|Cost of Sales}}. See [[How do I create a nominal code?]].}}
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* Go to {{Menu|{{NL}}|Journal Entries|Double Entry}}.
 
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* On {{DataPrompt|1st Centre :}}, enter the centre for "Vehicle Write-Off".
 
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* On {{DataPrompt|Date :}}, enter the date that you wrote off the vehicle.
 
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* On {{DataPrompt|Amount :}}, enter the value of the vehicle as it appears on the {{VS}} system as a positive amount, because you will be debiting the "Vehicle Write-Off" code and crediting the "Stock Value".
 
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* On {{DataPrompt|Cheque No./Comment :}} enter the {{DataValue|<Vehicle Stock number> and W/Off}}.
 
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* On {{DataPrompt|2nd Centre :}} enter the centre for your "Stock Value".
 
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* The {{DataPrompt|Amount :}} will automatically be entered in as a negative of the amount entered previously.
 
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* Accept the posting.
 
  
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This posting should have the effect of reducing the value of your stock on the accounts by the cost of the vehicle concerned, and increasing the cost of sales in the month in question by the same amount hence reducing your profit in that period.  
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Post a Multiple Entry journal to account for the write-off.
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* Go to {{Menu|{{NL}}|Journal Entries|Multiple Entry}}.
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* Enter the {{DataPrompt|Date}} of the write-off.
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* Enter your Unit Accruals centre e.g. Z940.
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* Under the {{DataPrompt|Credit}} column enter the amount to write off i.e. the value posted to the accruals centre by changing the status of the unit.
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* Enter a {{DataPrompt|Comment}} e.g. Unit 1234 Write-Off
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* On the next line of the journal enter your Write-Off nominal centre.
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* Under the {{DataPrompt|Debit}} column enter the amount to write off i.e. the value posted to the accruals centre by changing the status of the unit.
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* At {{DataPrompt|Comment}} press {{KeyPress|C-F6}} to repeat the comment from the line above.
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* If the unit had expenses associated to it, repeat the above but using the Unit Expenses Accrual and the Write-Off nominal centre. Make sure you Credit the Expense Accrual code unless the unit only had positive expenses associated to it e.g. bonuses, in which case you would Debit the Unit Expense code and Credit the Write-Off code.
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* Click {{Button|Done}} and {{Button|Accept}}.
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 +
This posting should have the effect of reducing the value of your stock on the accounts by the cost of the unit concerned, and increasing the cost of sales in the month in question by the same amount hence reducing your profit in that period.
  
 
=== Accounting for Insurance Money received ===
 
=== Accounting for Insurance Money received ===
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In order to account for any insurance money received for the vehicle written off, you will need to know the Nominal Centres for your {{DataValue|Vehicle Write-Off}} and {{DataValue|Bank Account}}.
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In order to account for any insurance money received for the unit written off, you will need to know the Nominal Centres for your {{DataValue|Unit Write-Off}} and {{DataValue|Bank Account}}.
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As before you will need to do a journal between these centres.
 
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* Go to {{Menu|{{NL}}|Journal Entries|Double Entry}}.
 
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* On {{DataPrompt|1st Centre :}}, enter the centre for "Bank Account".
 
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* On {{DataPrompt|Date :}}, enter the date that you received the payment from the insurance company.
 
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* On {{DataPrompt|Amount :}}, enter the value of the insurance payout as a positive amount, because you will be debiting the "Bank Account" code and crediting the "Vehicle Write-Off".
 
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* On {{DataPrompt|Cheque No./Comment :}} enter the {{DataValue|<Vehicle Stock number> and In/Pay}}.
 
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* On {{DataPrompt|2nd Centre :}} enter the centre for your "Vehicle Write-Off".
 
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* The {{DataPrompt|Amount :}} will automatically be entered in as a negative of the amount entered previously.
 
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* Accept the posting.
 
  
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This posting should have the effect of reducing the value of Vehicle Write-Off on the accounts by the insurance pay out of the vehicle concerned, and decreasing the cost of sales in the month in question by the same amount hence restoring your profit in that period.  
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* Go to {{Menu|{{NL}}|Journal Entries|Cashbook Entry}}.
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* Select {{DataPrompt|Money in}}
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* Enter the {{DataPrompt|Centre}} for your bank account.
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* On the next line enter the centre for the Unit Write-Off.
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* Enter the {{DataPrompt|Date}} that you received the payment from the insurance company.
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* At {{DataPrompt|Credit}} enter the value of the insurance payout.
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* At {{DataPrompt|Comment}} enter a suitable comment e.g. Unit 1234 Ins Payout.
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* Click {{Button|Done}} and {{Button|Accept}}.
  
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=== Showing the vehicle as being Written Off ===
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This posting should have the effect of reducing the value of Unit Write-Off on the accounts by the insurance pay out of the unit concerned, and decreasing the cost of sales in the month in question by the same amount hence restoring your profit in that period.
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You will need to show that the vehicle has been written off in the {VS}} and account for the value of the vehicle when doing a stock valuation.
 
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You will need to:
 
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* Go to {{Menu|{{VS}}|Add or Edit Vehicles}}
 
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* On the {{DataPrompt|Search on :}} enter the vehicle in question and press {{KeyPress |Enter}} to list the vehicle.
 
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* Press {{KeyPress|F5}} or click {{Button|Edit}} to enter the vehicle's properties.
 
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* Set the {{DataPrompt|Location:}} to {{DataValue|WRO}}.
 
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{{Tip|iconsize=small|text=''If this location does not exist, press {{KeyPress|S-F10}} on the {{DataValue|location}} and enter in an appropriate {{DataPrompt|Description:}}, press {{KeyPress|Esc}} and click {{Button|Accept}} to create the location.''}}
 
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* Set the {{DataPrompt|Status:}} to {{DataValue|WRO}}.
 
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{{Tip|iconsize=small|text=''If this status does not exist, press {{KeyPress|S-F10}} on the {{DataValue|status}} and enter in a {{DataPrompt|Description:}}, set the {{DataPrompt|Text:}} and {{DataPrompt|Background:}} to colours that stand out, press {{KeyPress|Esc}} and click {{Button|Accept}} to create the status.''}}
 
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* Click on the {{Tab|Details}} tab and in the {{DataPrompt|Notes}} section enter in that the vehicle has been written off, when, how and if possible by whom.}}
 
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* Click on the {{Tab|Sale}}.
 
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** On the {{DataPrompt|Sale date:}} enter the date when the vehicle was written off.
 
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** Set the {{DataPrompt|Target price:}} to {{DataValue|£0.00}}.
 
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** Set the {{DataPrompt|Actual price:}} to {{DataValue|£0.00}}.
 
  
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''See [[How do I Exclude Vehicles from my Stock Valuation?|here]] on how to exclude this vehicle from your stock valuation.''
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== See also ==
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* [[How do I create a nominal code?]]
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* [[How do I search for units that are in stock?]]
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* [[How do I exclude units from my stock valuation?]]
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* [[Creating a used unit]]
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* [[Creating a new unit]]
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* [[Creating a new unit by copying an existing unit]]
  
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== See Also ==
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{{KB_Tags|unit, vehicle, wholegood, caravan, agricultural machine, tractor, trailer, car, suv, motorcycle, motorbike, scooter, truck, van, lorry, motorhome, quad, atv, boat, tricycle, quadricycle, bicycle, bike, plant, written, write, off, write-off, insurance, value, motor, home}}
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* [[How do I Create a Nominal Code?]]
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{{How}}{{KB_VS}}{{ZN_Admin}}
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* [[How do I Search for Vehicles that are In Stock?]]
 
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* [[How do I Exclude Vehicles from my Stock Valuation?]]
 
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* [[Creating a New Vehicle]]
 
  
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{{KB_Tags|Vehicle, Written, Write, Off, Write-Off, Insurance, Value, Bike, Car, Van, Motorhome, Motor, Home, Caravan, Motorcycle}}{{KB_VS}}
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{{KB_Ref|VS01}}

Latest revision as of 13:28, 10 May 2021

Summary

This article will explain how to account for writing off a unit from Unit Sales and altering the values in the accounts.

More Information

Units: Unit is a general term used to cover all types of vehicle and machinery, including items such as motorcycles, scooters, cars, trucks, vans, caravans, motorhomes, boats, tractors, ATVs, agricultural equipment, wholegoods and construction equipment.

As the summary states, there are two things to do in order to write off a unit from the system.

Showing the unit as being Written Off

You will need to show that the unit has been written off in the Unit Sales system.

  • Go to " Unit Sales Add or Edit Units".
  • On the "Search on:" enter the unit in question and press <Enter> to list the unit.
  • Press <F5> or click [Edit] to edit the unit.
  • Set the "Status:" to 'WRO' (you may need to create a new code. If so make sure it is a non-stock status - see How do I create a unit status?).
  • Click on the [Details] tab and in the "Notes" section enter in that the unit has been written off, when, how and if possible by whom.
  • Go to the [Purchase] tab and set the "Valuation Excluded?" flag to 'Yes'.
  • Click [Done] and [Accept].
The system will immediately reverse the journal holding the unit in stock i.e. Credit Unit Stock Value (usually 70001/71001) and Debit Unit Accruals (usually Z940). If there are any expenses against the unit these will also be reversed to Credit Stock of Expenses (usually 70101/71101) and Debit Expense Accruals (usually Z944).
  • You should now deal with the postings made to take the unit out of your stock.

Writing Off the Value of the Unit

Make sure you know the postings made so you understand which centres you need to Credit in order to Debit your Profit & Loss with the Write Off.

  • Use Nominal Review to view any postings made on today's date. You can enter the unit stock number into the "Filter on" field to help you to find the postings made.
  • Make sure you have a 'Unit Write-Off' Nominal Centre.
If you do not have a 'Unit Write-Off' centre, you will need to create one making sure that you set the "P/L indicator" to 'Cost of Sales'. See How do I create a nominal code?.

Post a Multiple Entry journal to account for the write-off.

  • Go to " Nominal Ledger Journal Entries Multiple Entry".
  • Enter the "Date" of the write-off.
  • Enter your Unit Accruals centre e.g. Z940.
  • Under the "Credit" column enter the amount to write off i.e. the value posted to the accruals centre by changing the status of the unit.
  • Enter a "Comment" e.g. Unit 1234 Write-Off
  • On the next line of the journal enter your Write-Off nominal centre.
  • Under the "Debit" column enter the amount to write off i.e. the value posted to the accruals centre by changing the status of the unit.
  • At "Comment" press <Ctrl+F6> to repeat the comment from the line above.
  • If the unit had expenses associated to it, repeat the above but using the Unit Expenses Accrual and the Write-Off nominal centre. Make sure you Credit the Expense Accrual code unless the unit only had positive expenses associated to it e.g. bonuses, in which case you would Debit the Unit Expense code and Credit the Write-Off code.
  • Click [Done] and [Accept].

This posting should have the effect of reducing the value of your stock on the accounts by the cost of the unit concerned, and increasing the cost of sales in the month in question by the same amount hence reducing your profit in that period.

Accounting for Insurance Money received

In order to account for any insurance money received for the unit written off, you will need to know the Nominal Centres for your 'Unit Write-Off' and 'Bank Account'.

  • Go to " Nominal Ledger Journal Entries Cashbook Entry".
  • Select "Money in"
  • Enter the "Centre" for your bank account.
  • On the next line enter the centre for the Unit Write-Off.
  • Enter the "Date" that you received the payment from the insurance company.
  • At "Credit" enter the value of the insurance payout.
  • At "Comment" enter a suitable comment e.g. Unit 1234 Ins Payout.
  • Click [Done] and [Accept].

This posting should have the effect of reducing the value of Unit Write-Off on the accounts by the insurance pay out of the unit concerned, and decreasing the cost of sales in the month in question by the same amount hence restoring your profit in that period.

See also


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Keywords AND Misspellings
unit, vehicle, wholegood, caravan, agricultural machine, tractor, trailer, car, suv, motorcycle, motorbike, scooter, truck, van, lorry, motorhome, quad, atv, boat, tricycle, quadricycle, bicycle, bike, plant, written, write, off, write-off, insurance, value, motor, home
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