Difference between revisions of "How do I deal with service contracts?"
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== Summary == | == Summary == | ||
| − | If you choose to sell a service contract to a customer they would usually pay up front for this service. This article explains how to process the invoice and allocate the value to the work during the period. | + | If you choose to sell a service contract to a customer they would usually pay up front for this service. This article explains how to process the invoice and allocate the value to the work during the period. |
{{Warning|text=Please note that Platinum does not have a Service Contract option. You are advised to keep separate records for each customer to ensure you can track and monitor their balance.}} | {{Warning|text=Please note that Platinum does not have a Service Contract option. You are advised to keep separate records for each customer to ensure you can track and monitor their balance.}} | ||
== More Information == | == More Information == | ||
| − | Your accounts team should assist with the setup and processing of the contract including creating the required Sales Centres, Nominal Centres and internal sales account. | + | Your accounts team should assist with the setup and processing of the contract including creating the required Sales Centres, Nominal Centres and internal sales account. |
=== Accounts - Configuration === | === Accounts - Configuration === | ||
| − | * Create a [[How do I create a sales or purchase centre?|Sales Centre]] for Service Contracts and link it to a Balance Sheet - Liability [[How do I create a nominal code?|Nominal Centre]] for Service Contracts. | + | * Create a [[How do I create a sales or purchase centre?|Sales Centre]] for Service Contracts and link it to a Balance Sheet - Liability [[How do I create a nominal code?|Nominal Centre]] for Service Contracts. |
| − | * If you intend to sell the contract within a unit invoice or parts invoice you should create a [[How do I Create Non-Moving Items?|non-moving]] stock code and allocate the above sales centre to that code. | + | * If you intend to sell the contract within a unit invoice or parts invoice you should create a [[How do I Create Non-Moving Items?|non-moving]] stock code and allocate the above sales centre to that code. |
* Create an internal customer account for '''Service Contracts''', following this guide [[How do I create an internal account?]]. The account will be similar to a workshop consumable account so follow the guidelines laid out in the article for this type of account. The {{DataPrompt|Payment Centre}} should be the nominal centre for Service Contracts. | * Create an internal customer account for '''Service Contracts''', following this guide [[How do I create an internal account?]]. The account will be similar to a workshop consumable account so follow the guidelines laid out in the article for this type of account. The {{DataPrompt|Payment Centre}} should be the nominal centre for Service Contracts. | ||
| − | * You may wish to allocate a [[Setting up an account status|status]] to the customer account for {{DataPrompt|Service Contract Applied}} which users would see when raising the job to remind them this customer may have a contract in place. | + | * You may wish to allocate a [[Setting up an account status|status]] to the customer account for {{DataPrompt|Service Contract Applied}} which users would see when raising the job to remind them this customer may have a contract in place. |
== Invoicing the Contract == | == Invoicing the Contract == | ||
| − | Depending on how you choose to sell the contract; either add the non-moving stock code to your unit invoice or parts invoice or follow this article to raise a {{SL}} [[How do I produce a text invoice in Platinum?|freetype invoice]]. If the latter, make sure the sales centre you assign to the invoice is the new code created for Service Contracts. | + | Depending on how you choose to sell the contract; either add the non-moving stock code to your unit invoice or parts invoice or follow this article to raise a {{SL}} [[How do I produce a text invoice in Platinum?|freetype invoice]]. If the latter, make sure the sales centre you assign to the invoice is the new code created for Service Contracts. |
| − | The invoice should usually be vatable and paid off by whichever method the customer chooses to use e.g. Credit Card. If unsure about the VAT to charge please consult your accountant or HMRC for advice. | + | The invoice should usually be vatable and paid off by whichever method the customer chooses to use e.g. Credit Card. If unsure about the VAT to charge please consult your accountant or HMRC for advice. |
{{Tip|text=If the price you quote to the customer is including VAT make sure you enter the gross price and then use the function keys within Platinum to calculate the nett amount. This will ensure the price you charge is Nett plus VAT to equal the Gross amount specified to the customer. If you enter a Gross amount in a Nett field Platinum will always expect it to be a Nett value so will add VAT on top. }} | {{Tip|text=If the price you quote to the customer is including VAT make sure you enter the gross price and then use the function keys within Platinum to calculate the nett amount. This will ensure the price you charge is Nett plus VAT to equal the Gross amount specified to the customer. If you enter a Gross amount in a Nett field Platinum will always expect it to be a Nett value so will add VAT on top. }} | ||
=== Accounts - Postings === | === Accounts - Postings === | ||
| − | When the invoice is processed and the month end routine carried out, the nett amount of the contract will be posted to the nominal centre for service contracts. | + | When the invoice is processed and the month end routine carried out, the nett amount of the contract will be posted to the nominal centre for service contracts. |
| − | The customer invoice should be paid off as usual by their chosen payment method. | + | The customer invoice should be paid off as usual by their chosen payment method. |
| − | You may choose to record a note on their customer record to specify that they have a contract in place and the duration. | + | You may choose to record a note on their customer record to specify that they have a contract in place and the duration. |
== Processing the Work == | == Processing the Work == | ||
| − | When the customer brings their unit in for work under the contract you should [[Creating workshop jobs|create]] a {{WS}} job and list them as the {{DataPrompt|Keeper}}. | + | When the customer brings their unit in for work under the contract you should [[Creating workshop jobs|create]] a {{WS}} job and list them as the {{DataPrompt|Keeper}}. |
| − | * Change the {{DataPrompt|Invoice account}} to the internal account for Service Contracts. | + | * Change the {{DataPrompt|Invoice account}} to the internal account for Service Contracts. |
* Create and process the job as usual | * Create and process the job as usual | ||
| − | * When posting the payment the system will default to the Service Contract code as specified against your internal account. | + | * When posting the payment the system will default to the Service Contract code as specified against your internal account. |
| − | ** In the {{DataPrompt|Comment}} field you are advised to enter the job number and customer account code for reference. This will aid you when checking the balance on a contract from within the nominal centre. | + | ** In the {{DataPrompt|Comment}} field you are advised to enter the job number and customer account code for reference. This will aid you when checking the balance on a contract from within the nominal centre. |
=== Accounts - Checking the Balance === | === Accounts - Checking the Balance === | ||
| − | When the invoice and payment are processed, and the month end routine carried out, the payment for the work done will be posted to the nominal centre for service contracts so reducing the balance on this centre. Bear in mind the balance of the work done will be at the nett values you have charged yourselves internally so may be at cost rather than retail. | + | When the invoice and payment are processed, and the month end routine carried out, the payment for the work done will be posted to the nominal centre for service contracts so reducing the balance on this centre. Bear in mind the balance of the work done will be at the nett values you have charged yourselves internally so may be at cost rather than retail. |
You may review this centre prior to carrying out your month end by setting the {{DataPrompt|Include preview?}} flag to {{DataValue|Yes}} in [[What does nominal review show me?|Nominal Review]]. | You may review this centre prior to carrying out your month end by setting the {{DataPrompt|Include preview?}} flag to {{DataValue|Yes}} in [[What does nominal review show me?|Nominal Review]]. | ||
| − | The balance on the contract at the end of the contract period may be manually journalled to the Profit & Loss as profit. We would advise you to clarify this process with your accountant before posting any journals. | + | The balance on the contract at the end of the contract period may be manually journalled to the Profit & Loss as profit. We would advise you to clarify this process with your accountant before posting any journals. |
== See also == | == See also == | ||
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{{KB_Tags|service contract, service plan}} | {{KB_Tags|service contract, service plan}} | ||
| − | {{FAQ}}{{How}}{{KB_WS}}{{ | + | {{FAQ}}{{How}}{{KB_WS}}{{ZN_Accounts}}{{ZN_Admin}}{{ZN_WorkshopManager}} |
Latest revision as of 13:56, 8 July 2024
Contents
Summary
If you choose to sell a service contract to a customer they would usually pay up front for this service. This article explains how to process the invoice and allocate the value to the work during the period.
 | Please note that Platinum does not have a Service Contract option. You are advised to keep separate records for each customer to ensure you can track and monitor their balance. |
More Information
Your accounts team should assist with the setup and processing of the contract including creating the required Sales Centres, Nominal Centres and internal sales account.
Accounts - Configuration
- Create a Sales Centre for Service Contracts and link it to a Balance Sheet - Liability Nominal Centre for Service Contracts.
- If you intend to sell the contract within a unit invoice or parts invoice you should create a non-moving stock code and allocate the above sales centre to that code.
- Create an internal customer account for Service Contracts, following this guide How do I create an internal account?. The account will be similar to a workshop consumable account so follow the guidelines laid out in the article for this type of account. The "Payment Centre" should be the nominal centre for Service Contracts.
- You may wish to allocate a status to the customer account for "Service Contract Applied" which users would see when raising the job to remind them this customer may have a contract in place.
Invoicing the Contract
Depending on how you choose to sell the contract; either add the non-moving stock code to your unit invoice or parts invoice or follow this article to raise a Sales Ledger freetype invoice. If the latter, make sure the sales centre you assign to the invoice is the new code created for Service Contracts.
The invoice should usually be vatable and paid off by whichever method the customer chooses to use e.g. Credit Card. If unsure about the VAT to charge please consult your accountant or HMRC for advice.
 | If the price you quote to the customer is including VAT make sure you enter the gross price and then use the function keys within Platinum to calculate the nett amount. This will ensure the price you charge is Nett plus VAT to equal the Gross amount specified to the customer. If you enter a Gross amount in a Nett field Platinum will always expect it to be a Nett value so will add VAT on top. |
Accounts - Postings
When the invoice is processed and the month end routine carried out, the nett amount of the contract will be posted to the nominal centre for service contracts.
The customer invoice should be paid off as usual by their chosen payment method.
You may choose to record a note on their customer record to specify that they have a contract in place and the duration.
Processing the Work
When the customer brings their unit in for work under the contract you should create a Workshop job and list them as the "Keeper".
- Change the "Invoice account" to the internal account for Service Contracts.
- Create and process the job as usual
- When posting the payment the system will default to the Service Contract code as specified against your internal account.
- In the "Comment" field you are advised to enter the job number and customer account code for reference. This will aid you when checking the balance on a contract from within the nominal centre.
Accounts - Checking the Balance
When the invoice and payment are processed, and the month end routine carried out, the payment for the work done will be posted to the nominal centre for service contracts so reducing the balance on this centre. Bear in mind the balance of the work done will be at the nett values you have charged yourselves internally so may be at cost rather than retail.
You may review this centre prior to carrying out your month end by setting the "Include preview?" flag to 'Yes' in Nominal Review.
The balance on the contract at the end of the contract period may be manually journalled to the Profit & Loss as profit. We would advise you to clarify this process with your accountant before posting any journals.
See also
- How do I create a sales or purchase centre?
- How do I create a nominal code?
- How do I create an internal account?
- What does nominal review show me?
- How do I produce a text invoice in Platinum?
