Unit integration to nominal ledger

Details

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

1. The profit and loss to show the sale and cost of vehicles sold at the end of the month.
2. 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 journal 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 Number
  • 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 Sale tab of the vehicle record.

Operations - Used Vehicles

Non Part Exchange Purchases

• Create the vehicle record and enter all the necessary details, including the vehicle purchase information.
• 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" or 'VEH001'.
  • If the part exchange is left with you to sell prior to the new vehicle deal being invoiced, then it is sensible to treat the part exchange as though it were a simple purchase 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 vehicles 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 Sale tab on the vehicle.

At the Month End

Agreeing the Nett Sales on the Profit & Loss

• Run the "Vehicle 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 been posted correctly. If they don’t agree, 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 "Vehicle 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 the stock of 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 "Vehicle 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 the stock of 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

1. Run the "Vehicle Valuation at a Date" for the end of last month.
2. Run the "Vehicle Purchases" for the current month.
3. Run the "Vehicle Sales and Cost of Sales" for the current month.
4. Run the "Vehicle Valuation at a Date" for the end of the current month.

Check the stock figure on the balance sheet agrees to vehicle valuation at the end of last 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 end of last month and then add Option 2 Vehicle Purchased, deduct Option 3 Cost of Vehicles sold and the result should agree to Option 4, the stock value at the end of the month

See Also

• Stock Integration to the Nominal Ledger

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Keywords AND Misspellings

Vehicle Reconciliation, Month End, Vehicle, Cost of Sales cost, sales, Vehicle, Integration, Inter, Nominal