Warranty Service Contract Management

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.

Open

Open

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.