DealersEdge Professional Forums

I'm curious about the restock fee for MR11 parts. On the GM invoice the 35% is listed under the heading of Discount % and dollar amount is under the heading Discount Amount. Is the restock fee actually a chargeback for some kind of discount on the original parts purchase from GM?

This is directly from the Manual:

Customer Special Order Return (CODE 11)
All parts ordered CSO by PASE Terms Dealers earn 1% return reserve and can be returned following the normal return reserve guidelines. If the dealer chooses not to return the parts using their return reserve, they can return the part using a MR11 return. However, all MR11 returns will be assessed a 35% restocking fee. MR11 returns can be made for any part ordered via CSO up to 365 days from the date the parts were shipped.

So clearly it's a restocking fee. My business office is saying it's a chargeback for a discount so it should be applied to our 687 account.

Business office is incorrect. I just take the loss on out of my 24200 account but I have $ built up in my account so it's not a huge deal for me. Not sure what your accounting situation is but always better to take the loss in 24200 over 68700 if you have the option.

PartsPlant81 wrote:Not sure what your accounting situation is but always better to take the loss in 24200 over 68700 if you have the option.

If you take the 35% out of 24200, isn't your inventory "off" when you calculate your physical inventory value? Depending on how much CSO/MR11 returns you do this could lead to an inventory value problem.

68700 or even 68800, in my opinion is a better choice - but it is a dealer choice and no two dealers are the same.

GM STANDARD ACCOUNTING MANUAL - ACCOUNT DEFINITIONS / USES

687 Purchase Allowances
Cost of Sales
Fixed Operations
Cost of Sales Synopsis
Account 687 is established to record the cash or credit from the manufacturer for ordering and/or selling Parts and Accessories under regular or promotional programs.


688 Adjustment – Parts and Accessories Inventory
Cost of Sales
Fixed Operations
Cost of Sales Synopsis
Account 688 is established to record the amount of adjustment required to reconcile the value of inventory on hand recorded in Account 242, Parts & Accessories (Inventory).

Kaju65 wrote:So clearly it's a restocking fee. My business office is saying it's a chargeback for a discount so it should be applied to our 687 account.

I charge it to my parts policy. All my guys get paid on Gross Profit, as do I, and there's no reason to kill ourselves. My accounting office and the owner are aware of this as well.

Ichabod Farquar wrote:

PartsPlant81 wrote:Not sure what your accounting situation is but always better to take the loss in 24200 over 68700 if you have the option.

If you take the 35% out of 24200, isn't your inventory "off" when you calculate your physical inventory value? Depending on how much CSO/MR11 returns you do this could lead to an inventory value problem.

68700 or even 68800, in my opinion is a better choice - but it is a dealer choice and no two dealers are the same.

GM STANDARD ACCOUNTING MANUAL - ACCOUNT DEFINITIONS / USES

687 Purchase Allowances
Cost of Sales
Fixed Operations
Cost of Sales Synopsis
Account 687 is established to record the cash or credit from the manufacturer for ordering and/or selling Parts and Accessories under regular or promotional programs.


688 Adjustment – Parts and Accessories Inventory
Cost of Sales
Fixed Operations
Cost of Sales Synopsis
Account 688 is established to record the amount of adjustment required to reconcile the value of inventory on hand recorded in Account 242, Parts & Accessories (Inventory).

Valid point. I could also put it into 68800 however my consultants and I get paid off of profit so I would never hit 68700.
All of the parts in question are 11-12 months sitting on the shelf collecting dust so their value is diminished and they usually end up getting field scrapped from GM anyway.
I have enough build up in 24200 that I know I have my own scrap $ to offset the 35% fee.

The restock fee should go to 68800.

This also where you should put the price difference from a buyout from another dealer as well. If you buy a part from a dealer and GM cost is $1.00 and the dealer charges you 15% over cost, so you pay $1.15, $1.00 goes to 24200 and $0.15 goes to 68800. This keeps your book value correct as you are receipting a part that posts $1.00 to you physical inventory, but you paid $1.15 for it.

Z23T wrote:The restock fee should go to 68800.

This also where you should put the price difference from a buyout from another dealer as well. If you buy a part from a dealer and GM cost is $1.00 and the dealer charges you 15% over cost, so you pay $1.15, $1.00 goes to 24200 and $0.15 goes to 68800. This keeps your book value correct as you are receipting a part that posts $1.00 to you physical inventory, but you paid $1.15 for it.

That seems like a lot of paperwork. Why not just change your cost when you sell the part on the invoice/repair order and put it all in 242? that still keeps you inventory at the correct level.

CADLOU wrote:

Z23T wrote:The restock fee should go to 68800.

This also where you should put the price difference from a buyout from another dealer as well. If you buy a part from a dealer and GM cost is $1.00 and the dealer charges you 15% over cost, so you pay $1.15, $1.00 goes to 24200 and $0.15 goes to 68800. This keeps your book value correct as you are receipting a part that posts $1.00 to you physical inventory, but you paid $1.15 for it.

That seems like a lot of paperwork. Why not just change your cost when you sell the part on the invoice/repair order and put it all in 242? that still keeps you inventory at the correct level.

You will be dinged on your sales loyalty for changing cost.