Setting up MRA's and Cycle Returns as receivables

[joe r]

I know many dealers set up factory returns as receivables. Cores also.

Do you create a counter ticket for each return and process the credit memo as received on account? If I send 10 cores, would I create a counter ticket for the total amount? Or is there a different way for accounting to get it on the books?

Our CPA will be asking me to do this and I agree. I just need some tips.

Thanks!!!

Joe R

[Marcus]

If your in house system can print the return, just give the final draft with the total amount to the office manager or comptroller and they should set it up as a receivable.

[KENMAN]

I USE A COUNTER TICKET FOR MRA RETURNS THEN YOU CAN TRACK IT WHEN THE CREDIT MEMO COMES IN TO MAKE SURE EACH ONE GETS PROCESSED PROMPTLY. NO RESON THIS WOULDNT WORK FINE FOR CORES ALSO.

[Chuck Hartle]

I quess I am just trying to figure out the logic here? I have certainly seen a lot of different schools of thought here.

As I see it, you have a hard copy of an MRA or Core Credit Request from GPOPP when you submit it. The Cycle Return Request is sent to you along with the Pull Tags a week or so after the request is sent on GPOPP.

So much for the obvious. Yet, these are then counted as WIP (Work in Process) from the time they leave the parts department. If you were doing a physical inventory tomorrow, these would be written down as WIP and subtracted from your inventory (they are out of your physical but still in the accounting side).

The questions I am posing here, and it is just a question as I don't really think there is a right or wrong answer, is why create a receivable when it is already WIP and you have a record of it? Do Controllers and/or Office Managers really want this to be a receivable? Finally, the last question for all of you.... How do you post your cores and or parts to these counter tickets as you set up the receivable? Do you sell the parts as a normal sale on the counter ticket?

Thanks,

Chuck Hartle'

[This message has been edited by Chuck Hartle (edited 12-12-2001).]

[joe r]

The concern come from the dealer telling me I have too many days supply. When I try to explain that he is working with book inventory figures and I work with on the shelf figures, he doesn't quite understand where the work in process falls into place. He believes the business office should have them showing as receivables. This happened during a month when I had two large returns and an unusual amount of MRA and core credits due. The next month, after all the credits came through, he told me my days supply was in line. I told him I had not done anything different. Now it's coming up again since I have many core credits due again.

Joe R

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[MMiller]

What carline is causing such a problem that you must set them up as a receivable. With GM you can have your credit within a day or 2 by send a "credit upon shipment" on the MR screen. If you are more aggressive you can get your credit before your dedicated carrier picks up your return.
Chuck as far WIP, parts shipped or on repair orders and still on the books, you would have to add not subtract the $$$ to your controlled value and cores to match the book.

[Gary J. Naples]

Hi Joe,

From my point of view nothing should leave the parts department without generating an invoice. Nevertheless, many dealers rely on credit memos and adjust the inventory book value accordingly. It really comes down to personal accounting preference. If your dealer wants it as a receivable despite logical argument to the contrary your choice is but one.

Gary J. Naples
GNA

[Ted@ADP]

If you are an ADP dealer:
to sell return parts on an invoice to a receivable account, make sure you have a sale type set up to go to the correct receivable account.

When you sell the parts, use an override of N after quantity sold for no history sale. You definitely do not want to requalify those parts.

Better, however, is to use the MSR (Multiple Stock Returns) routine. This new version of EXS lets you calculate a return based on your criteria, modify it, and print it with a number of different sorting options. Some manufacturers allow a direct DCS transfer of the return (no re-keying.) The best feature is an automatic minus adjustment of all the parts on the return. And finally, the return activity appears on the Factory Returns line on MGR rather than with other minus adjustments.

[fburrows]

I think invoicing a return would create more problems than it would fix. You are generating sales history and sales dollars that don't exist. The accounting office could easily set up a receivable account for returns and manually post each return at any point you mutually agree upon.

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Frank Burrows
Automotive Business Solutions
frank@autobusiness.org

[Marcus]

I hane several car lines, none of which use a GPOPP or a credit return list. Most asian car lines are in the 1950's as far as the parts business goes.