Unit integration to nominal ledger
From Catalyst
Contents
Summary
This article explains how Platinum integrates your Unit Sales to your Nominal Ledger.
 | Please note: If your system is using the Automatic Cost of Sales facility you do not need to post the journals described below. The system will post journals between Stock Value and Unit Accruals as each unit is created. When sold the system will post a journal between Stock Value and Cost of Sales. The Debit entry to Unit Accruals is created when you post the supplier invoice to the Purchase Ledger or when printing a purchase invoice for a Used/Part Exchange Unit. If you are unsure which method your system is using please Contact your Platinum dealer or our support team on 0116 230 1500 or by using our website support contact page. |
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. |
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 units sold at the end of the month.
- The balance sheet to show the value of unit stock at the end of the month.
To achieve this we use a combination of unit report generator reports and journal entries.
Operations - New Units
When the unit is delivered
- Create the unit record and enter all the necessary details, including the unit purchase credentials.
- Update the Purchase tab of the unit 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 unit you are entering into stock, create the unit and these areas will be posted into the accounts when it arrives and you will need to update/check the purchase detailed on the unit record matches the invoice.
When the Unit is sold
- Invoice the unit through the unit sales, sales ordering/invoice routine.
- At the month end work out the cost of the unit 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 unit in the unit sales will have a status of sold, and all the sale information is posted automatically to the Sale tab of the unit record.
Operations - Used Units
Non Part Exchange Purchases
- Create the unit record and enter all the necessary details, including the unit purchase information.
- Update the Purchase tab of the unit stock record with the following fields:-
- 'Supplier'
- 'Purchase Amount'
- 'Finance Balance' (if there is one)
- Enter the amount you are paying for the unit 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 unit sales order and not purchased manually.
- They are not purchased into stock, from the accounts point of view, until the sale unit has been invoiced.
- The credit account will be the "Default Unit Purchase" or 'VEH001'.
- If the part exchange is left with you to sell prior to the new unit 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 Unit is sold
- Invoice the unit through the unit sales, sales ordering/invoice routine.
- At the month end work out the cost of the units 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 unit in the unit sales will have a status of sold, and all the sale information is posted automatically to the Sale tab on the unit.
At the Month End
Agreeing the Nett Sales on the Profit & Loss
- Run the "Unit Sales & Cost of Sales" for the month you are closing off.
- Check the total of new & used units agrees to the new and used sales on the profit and loss. Use the " Nominal Review" to compare stock numbers
| Remember when you invoice a unit 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 Units
- Using the "Unit Sales & Cost of Sales" for the month you are closing off, journal the total cost of new units sold from the balance sheet centre for the stock of new units to the profit and loss centre for the cost of sales of new units.
Posting the Cost of Sale Journal - Used Units
- Using the "Unit Sales & Cost of Sales" for the month you are closing off, journal the total cost of used units sold from the balance sheet centre for the stock of used units to the profit and loss centre for the cost of sales of used units.
Reconciling the Stock Figure on the Balance Sheet
Opening Stock + Purchases - Cost of Sales = Closing Stock
- Run the " Unit Valuation at a Date" for the end of last month.
- Run the " Unit Purchases" for the current month.
- Run the " Unit Sales and Cost of Sales" for the current month.
- Run the " Unit Valuation at a Date" for the end of the current month.
| Check the stock figure on the balance sheet agrees to unit 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 units in unit 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 Unit Purchased, deduct Option 3 Cost of Units 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
- How do I post road fund licence and registration fee as expenses?
- What should I consider at month end?
- Selling a unit
