BULK OIL INVENTORY

[rob1]

DOES ANYONE HAVE A GOOD WAY OF TRACKING BULK OIL INVENTORY? THE 500 GALLON TANKS THAT WE HAVE HERE HAVE A GAUGE ON TOP THAT TELLS 1/4,1/2,OR 3/4.BUT ALL I'M REALLY DOING IS GUESSING WHEN I TAKE A MEASUREMENT. ALSO WHEN CHARGING OUT OIL ON RO'S WE HAVE A SET PART-NO. THAT EQUALS 4 QUARTS THEN WE CHARGE ANY ADDITIONAL QUARTS OUT ALSO. MY INVENTORY WAS ALMOST PERFECT FOR EOM IN JULY BUT OFF QUITE A BIT FOR AUGUST EOM. WE HAVE TO DIAL THE OIL UP BEFORE IT CAN BE PUMPED SO I'M NOT WORRIED THAT IS BEING TAKEN WITHOUT BEING CHARGED OUT. ANY IDEAS????

[MMiller]

Set up a parts number with pricing equaling 1 quart. When your oil is delivered multiply
the gallons received by 4 to get the # of quarts to receipt. When full to the max it should equal 2000 qts. If all sales are sold as qts that should end the problem.

My 660 gal tank has a gauge but is broken down by inches. I use number of gallons per inch and multiple by 4 to audit the controlled oil inventory in my system and than compare that to my book figure. it took a couple of months to fine tune the gallons per inch.

To give your self a cushion in case of error in calculation bump your cost $ .10 per quart. You can always get it back if you didn't need it.

[This message has been edited by MMiller (edited 09-10-2002).]

[Doug]

Also double check the posting of purchases to the inventory. For example, do the oil invoices also have charges for gear lube, chassis grease, floor mats, etc which should go to a differnet account ?

If they do, then it would be easy to accidentally post some of these purchases into your oil inventory, inflating the book value.

If your shop is like ours, besides the main bulk oil tanks you may have smaller roll-around tanks with oil and ATF. If you have these, make sure they are accounted for. One time a found three 16 gallon barrels of ATF holed away in the corner of the shop----together with the 16 gallon barrels of wheel bearing grease.

Good luck,
Doug

[scotstrong]

Don't forget to take into consideration your work-in-process. Depending on the number of unclosed repair orders at month end with bulk oil charged out, this could be a large part of your variance.

[ralphc10]

Also don't forget to make sure, if you are keeping oil in a separate inventory account other than your hard parts, you need to have SRC overrides set up for parts & service invoicing specifications.

[tjsmith]

Also need to watch for invoices. We are on the GM bulk oil program, & we may be 3 to 4 invoices behind.(The truck has made 3 dumps, but GM has not sent me an invoice yet.) Plus during that time the price of oil has gone up! So you may go a month or so with the wrong cost on your oil.

[Doug]

Tell me about it !

Our business manager is still furious with me since we went with GM bulk oil....all because of invoicing problems.

Getting invoiced *weeks* after getting deliveries is a real PITA.

Cheers
Doug

[Louis]

Yes, we too have had problems with the GM invoicing. Because of that and the fact that the GM oil is overpriced we will soon be changing over to an independent oil supplier. As far as the inventory control goes there is a VERY good article in the September 2001 issue the "The Parts Manager" that relates to this very problem. We have our inventory set up in pints so that we can bill out half-quarts. Most GM vehicles require 4 1/2 qts. of oil. This way the customer gets billed the correct amount of oil and our oil inventory stays true.

Louis

[Magpie]

We too have problems getting invoiced - I guess all oil companies bill slowly (tell your business manager to enjoy the cash float!) If we have not recieved an invoice by month end, we post the packing slip value as a prepaid expense in accounting so the purchases can be included in reconciling the oil inventory account.

[Doug]

Posting from packing slip: We do the same thing out of necessity.

I'm about ready to switch back to an independant supplier. But, I'm not sure our parts manager will be too happy

Just out of curiosity....how many stores have the parts mgr handle oil inventory versus the service manager? I'm a service manager and have been doing it for years. Not complaining (it's not like it's a huge task), just wondering....

Cheers
Doug