A product trade-in can be processed easily at the counter, complete with the proper postings made to the G/L as follows:
- In preparation for processing trade-ins, setup a special Sales Product Class just for trade-ins in System Maintenance -> Configure System Settings -> Accounting -> Sales Classes.The 'Revenue Account' should be setup as a Sales Inventory Account. This will act as a temporary holding account for the value of the trade-in product. A debit will be posted to this account at the receipt and purchase of the trade-in, for the cost of the used product. This cost amount will later be cleared out, when the used product is transferred from the general trade-in product record to the correct product record and class.
- Now create a general Trade-In sales product with zero quantity in Inventory Control -> Sales Inventory, and assign it to the new Trade-In Sales Product Class. Set up this general Trade-In sales item with the product Cost = 0, the Cost Type = +, List = 0, and Inventory Checkbox is Not set.
- Then at the counter when any Trade-In is generated, two product details will be entered on the invoice.
- Always enter the sale of your new product for its full value in the normal manner.
- On a second detail line, to receive the used product, enter the general trade-in sales product number and over-type its description with the actual Trade-In product description. The quantity for this used product should be -1 (negative one) to receive the trade-in into your inventory, and to record the credit to the customer.
The dollar difference between the new product sold at list and the used Trade-In product value credited, will be the resulting invoice amount charged to the customer on the invoice.
- After the customer has gone, add the used product into your inventory with the correct description and zero quantity in Inventory Control -> Sales Inventory or Inventory Control -> Rental Inventory as appropriate, complete with the relevant Product Class.
- To complete the transfer of the Trade-In product into sales stock or add it to the rental fleet:
Generate a zero dollar invoice to the same customer to move the temporary Trade-In product quantity to the true sales product record in your inventory file. Again two product detail lines are used to complete the quantity transfer transaction.
- Reduce the quantity of the general Trade-In product number by entering it as a regular positive sale on the invoice at the trade in price.
- Increase the quantity of the real product number by entering the sale of -1 (negative one) to receive the used product at the same trade-in value.
The invoice should net out to zero total, but it provides an audit trail for the Trade-In purchase into your sales stock, as well as completes the correct G/L inventory postings.OR
Use Inventory Control -> Rental/Sale Transfers -> Transfer Sale to Rental to move the product quantity from the temporary Trade-In Sales product record to the correct Rental product number using the trade-in value as the cost. This process updates the rental fleet Fixed Asset tag information and generates the corresponding G/L inventory postings.