Unit integration to nominal ledger

Details

At the end of each month we need to achieve two things, from an accounts point of view: -

• The profit and loss to show the sale and cost of vehicles sold at the end of the month.
• The balance sheet to show the value of vehicle stock at the end of the month.

To achieve this we use a combination of vehicle report generator reports and journals entries.

Operations New Vehicles

When the vehicle is delivered

• Create the vehicle record and enter all the necessary details, including the vehicle purchase credentials.
• Update the Purchase tab of the vehicle stock record with the following fields: -
  • Supplier
  • Purchase Date
  • Invoice No.
  • Payment Due
  • Purchase Amount
  • Delivery Charge
  • VAT

• Post the purchase invoice into the purchase ledger using Purchase Ledger Postings, splitting the delivery costs accordingly.
• If you haven’t received the invoice or you have no financial details of the vehicle you are entering into stock, create the vehicle and these areas will be posted into the accounts when it arrives and you will need to update/check the purchase detailed on the vehicle record matches the invoice.

When the Vehicle is sold

• Invoice the vehicle through the vehicle sales, sales ordering/invoice routine.
• At the month end work out the cost of the vehicle sold and post a journal for this cost from the balance sheet across to the Profit and Loss, Cost of Sales.

The result is the stock figure on the balance sheet is reduced and the cost of sale, on the profit and loss, is increased. The vehicle in the vehicle sales will have a status of sold, and all the sale information is posted automatically to the vehicle sale tab.

Operations Used Vehicles

Non Part Exchange Purchases

• Create the vehicle record and enter all the necessary details, including the vehicle purchase credentials.
• Update the Purchase tab of the vehicle stock record with the following fields: -
  • Supplier
  • Purchase Amount
  • Finance Balance (if there is one)

• Enter the amount you are paying for the vehicle into the purchase amount and press F2 to produce the invoice (if not done by the accounts department)

Part Exchange Purchases

• Part Exchanges should be created from the vehicle sales order and not purchased manually.
  • They are not purchased into stock, from the accounts point of view, until the sale vehicle has been invoiced.
  • The credit account will be the “Default Vehicle Purchase” VEH001
  • If the part exchange is left with you to sell prior to the new vehicle deal being invoice, then it is sensible to treat the part exchange as though it were a non part-exchange and post a purchase payment to Z970 and add a deposit for the nett part-exchange to the sales order, to Z970

When the Vehicle is sold

• Invoice the vehicle through the vehicle sales, sales ordering/invoice routine.
• At the month end work out the cost of the vehicle sold and post a journal for this cost from the balance sheet across to the Profit and Loss, Cost of Sales.

The result is the stock figure on the balance sheet is reduced and the cost of sale, on the profit and loss, is increased. The vehicle in the vehicle sales will have a status of sold, and all the sale information is posted automatically to the vehicle sale tab.

At The Month End

Agreeing the Nett Sales on the Profit & Loss

• Run the “Bike Sales & Cost of Sales” for the month you are closing off.
• Check the total of new & used vehicles agrees to the new and used sales on the profit and loss. Use the Nominal History to compare stock numbers

Remember when you invoice a vehicle this is posting the sale onto the profit and loss for you, so we are only checking that these have posted correctly. If they don’t you must print a nominal ledger centre history report for centre and tick off the entries against this report to work out where the difference lies.

Posting the Cost of Sale Journal – New Vehicles

• Using the “Bike Sales & Cost of Sales” for the month you are closing off, Journal the total cost of new vehicles sold from the balance sheet centre for new vehicles to the profit and loss centre for the cost of sales of new vehicles.

Posting the Cost of Sale Journal – Used Vehicles

• Using the “Bike Sales & Cost of Sales” for the month you are closing off, Journal the total cost of used vehicles sold from the balance sheet centre for used vehicles to the profit and loss centre for the cost of sales of used vehicles.

Reconciling The Stock Figure On The Balance Sheet

Opening Stock + Purchases – Cost of Sales = Closing Stock

Run the “Vehicle Valuation at a Date” for the beginning of the month Run the “Bike Purchases” for the whole month Run the “Bike Sales and Cost of Sales” for the whole month Run the “Vehicle Valuation at a Date” for the end of the month

Check the stock figure on the balance sheet agrees to vehicle valuation at the beginning of the month. If they don’t, you need to work out the differences and either correct the balance sheet or correct the offending vehicles in vehicle sales.

You must have an agreed starting point.

Using Option 1 take the stock value at the beginning of the month and then add Option 2 Bikes Purchased. Deduct option 3 Cost of Vehicles sold and this should agree to option 4, the stock value at the end of the month

Feedback

Thank you for using our Knowledge Base, we value your feedback. Did you find this article useful? 'Yes' or 'No'

Keywords AND Misspellings

Vehicle Reconciliation, Month End, Vehicle Cost of Sales