How do I create a warranty account?

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Summary

The following article explains the preferred method for setting up a Warranty Account.

More Information

Details

  • Fill out all the relevant contact details for the warranty account.

Invoicing

  • Click the [Invoicing] tab.
"Centre Modifier"
Type 'W' and then press <Enter>and then press <Enter> on the warning message that is displayed.
"V.A.T. rate:"
Set to the Exempt Rate set for your system.
"Payment Centre:"
At the "Payment Centre", press <Ctrl+F1> to bring up a search box, and then type 'warranty' and press <Enter>. Select the one entitled "Warranty Control" which is usually '75001'. If one doesn't exist, contact your Accounts Department and ask that they create one for you as a Balance Sheet - Asset/Liability centre.
"Cash Sale:"
You may choose to set this to 'Yes' to ensure warranty work is paid off to the warranty control account as soon as it has been invoiced. Alternatively you may choose to set this to 'No'. When you receive the warranty credit you should use Sales Ledger Receipts to pay the invoice to warranty control. Any balance left e.g. due to the credit note being less than the amount claimed, should be paid off to a Profit & Loss - Warranty Loss/Gain Nominal Centre.
"Internal:"
Set this to 'Yes' (Transactions to internal accounts are considered "Outside the Scope" for V.A.T. purposes and will not appear on your VAT100 report). You will account for the V.A.T. when you receive the credit note from your warranty supplier.

Groups/Analysis

  • Click [Groups/Analysis] tab.
"Group:"
Type 'WAR'. Once again, this will aid you for reporting purposes.

Stock

You may wish to charge all Stock sold to this Warranty Account at cost, if so:

  • From the account code press <Shift+F10>.
  • Click the [Stock] tab.
  • Press <Shift+F5> - This brings up the Account Pricing Matrix.
"Pricing method:"
Set this to 'C' for Cost.
"Std. Average or Fifo:"
Enter 'F' for 'Fifo'.
  • Press <F2> and then <Enter> to accept.
  • Press <Esc> to exit.

Workshop

  • Finally, click the <Workshop> tab.
"Labour Rate:"
Enter in the default Labour Rate for Warranty work for this account.

See also


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Keywords AND Misspellings
warranty, creating, accounts, creating warranty accounts