Content Comparison

When sold service contracts

Tire/wheel warranty service????? 

There could be multiple lines.

$1000

CR Service Revenue, 1000

Should default Cost on the service line with a pre-defined amount, such as 500

Create Vendor Bill to automatically created, with customer first name, and last name, cost 

Set up Default Expense GL Account on the Vendor

Use it on the PIL

DB COGS, 500

CR Payable Account, 500, 

Then select records to pay

...

Overview

AATC occasionally sells Warranty Service Contracts as part of the Sales Order process.

• Multiple Warranty Service Contract items can be included in a single order.

• AATC must track payables and ensure timely payments to vendors.

...

Setup Instructions

1. Create Warranty Service Contract Item

   • Define a service item specifically for Warranty Service Contracts.

   • Check the Warranty Service Item checkbox.

   • Specify the Warranty Service Contact Vendor for the item.

...

2. Define Contract Cost and Price

   • Set the Standard Base Cost to establish the contract's cost.

   • Set the Standard Base Price to define the contract's selling price.

   (Refer to accompanying images for setup details.)

3. Configure Vendor Account

   • For the Warranty Service Contract Vendor:

     • Enter a default Expense GL Account in the vendor profile.

     • Ensure the GL Account is part of the COGS (Cost of Goods Sold) section.

...

Sales Order and Sales Invoice Process

Adding Warranty Service Items

• When a Warranty Service Item is added to a Sales Order or Sales Invoice:

  • Automatically populate the Standard Base Cost and Standard Base Price in the line item.

Posting Sales Invoices

1. Upon posting, check for Sales Invoice Lines where:

   • Item is a Warranty Service Item.

   • Warranty Service Purchase Invoice field is blank.

2. For eligible lines:

   • Create a Purchase Invoice for each Sales Invoice Line.

   • Use the Warranty Service Contact Vendor specified on the item setup page.

   • Use the default GL Account from the Warranty Service Contact Vendor profile.

3. Populate the following fields on the Purchase Invoice Header for reconciliation:

   • Bill-to Customer → Bill-to Warranty Customer.

4. Update the Purchase Invoice ID in the corresponding Sales Invoice Lines.

...

End-of-Month Routine

1. Review Pending Lines

   • Identify Sales Invoice Lines that meet the following conditions:

     • Item is a Warranty Service Item.

     • Warranty Service Purchase Invoice field is blank.

2. Create Purchase Invoices

   • Manually generate Purchase Invoices for all identified lines.

   • Populate the Warranty Service Purchase Invoice field on the corresponding Sales Invoice Lines.

3. Post and Pay Purchase Invoices

   • Post all open Purchase Invoices associated with Warranty Service Contracts.

   • Select and process Purchase Invoices for payment.