DealersEdge Professional Forums

One of the things that irks me is that quite often our countermen will pick up an AC-Delco part at a whoesale dealer and charge out the short (AC-Delco) number rather than adding the long GM number to the system and recording the sale. I have seen it all too often.
How am I supposed to get an accurate reading of what is actually selling? Unfortunately, with ADP, there is an answer. Look at the monthly MGR Report and look at invalid part # sales, and, heres the catch, you have to convert short numbers to long numbers and post lost sales to record any activity.
Wouldn't it be much easier to just use the long number, add it to the system, and actually record a sale? This way if someone else sells the same part in the near future, a history would be developed. After enough sales, HEY! WE MIGHT HAVE IT NEXT TIME.
Not to mention maintenance items or hard parts that fit current or recent model year vehicles that are just beginning to wear. Even if the part isn't genuine, wouldn't it be better to use the genuine part numbers, add them to the system, receipt them with a vendor code to indicate where the part was purchased, change the cost figures etc. & RECORD THE SALE!
It seems like a lot of work, but in reality, it doesn't take that long.
The main reason I brought this up is that our dealer is a GM Dealer that can order any GM Part for Buicks, Cadillacs, Chevrolet, Oldsmobile, Pontiac, GMC etc., and we have trade ins that have parts that are interchangeable, and even if they're not, I can't assess how many times that part has been requested unless somebody records the sale.

[This message has been edited by jdpetey (edited 09-21-99).]

It's extremely critical to bulding a profitable inventory that all parts are tracked. You have a very valid point. OEM equvalents must be tracked under the original part number in order to facilitate inventory control resulting in a qualified stocking OEM part.
However, since OEM equivalents generally do not match the OEM price, acceptable costing practices should be followed. I encourage you not to allow the practice of overriding prices at all. Instead, here are two suggestions for dealing with the cost problem.
Let's say you purchase a water pump from an aftermarket vendor and the cost is $90.00 which is $20.00 more than the OEM. In an obvious place on the vendor invoice note the OEM part number and the actual OEM cost. Then below it note the inventory account number with the aftermarket cost, and the parts gross profit account number with the $20.00 difference as a negative adjustment. If the aftermarket part was $20.00 less than the OEM then the gross profit account would reflect a positive adjustment.
The other way to accomplish this would be to write on the vendor invoice: debit parts inventory $70.00 (the actual OEM cost); Credit accounts payable $90.00 (the aftermarket cost); debit gross profit $20.00.
Likewise, if the aftermarket part had a cost of $70.00 and the OEM part had a cost of $90.00 you would: debit parts inventory $90.00; credit accounts payable $70.00; credit gross profit $20.00.
The advantages of these methods are to: help keep physical and book inventory in balance; provide an accurate and simple to use system; provide maximum control with minimum effort; eliminate the need to override prices.

Hope this helps you.

Gary J. Naples

Gary is exactly right. At our dealership, we had a stamps made for the vendor invoices:

RO# __________
242 __________
687 __________

242 and 687 are GM's inventory and discount account numbers. If the bought-out part has a lower cost than the OEM, the 687 amount is put in brackets: < >. Having the stamp helped the counter people 'get it'.

I've already been coding the invoices with 242 & 687. Still trying to get counter people to code invoices this way.

This pretty much applies to parts that cost less, but, what about when they cost more?
Is it a matter of putting a +/- in front of the 687 acct figure?

If you can get your counter people to put in the GM cost for the 242 amount, you could have your accounting department do the rest of the math. I'll bet they'd be happy to do it.



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