687 Account newbie question

[LOWAIRD1964]

I have a question with 687 and gross profit. What is the difference between putting gm's cost difference into 687 or just take the extra discount as gross profit?

example. Cost on part from distributor $10, GM cost on part $12

what would be the difference if I were to sell part on ticket at $10 cost and take the gross profit VS selling part for $12 and putting $2 into 687 account.

please explain-thank you

[cain555]

Well, the 687 would credit your department. Lowering the cost to $10 from $12 would give you a better gross profit, and if you are set up like our store, you are then paying your counter guy off of the gross profit, making it better for them. We dont pay our guys off 687 so that is just $2 profit for the parts department.

[TimK]

I have a question with 687 and gross profit. What is the difference between putting gm's cost difference into 687 or just take the extra discount as gross profit?

example. Cost on part from distributor $10, GM cost on part $12

what would be the difference if I were to sell part on ticket at $10 cost and take the gross profit VS selling part for $12 and putting $2 into 687 account.

please explain-thank you

We split the profit on RO's with service, so they would get 1/2 of the discount you just received if that part was sold in the shop. $1 might not seem like much but it adds up quickly.

[camaroman]

If you are a GM store there is a parts transfer that takes place and you loose a percentage of your profit to the service dept. I would say it is better to go to the 687 account which is not shared in the transfer.

[PartsPlant81]

The absolute correct process is to NOT change the cost of a GM part# no matter where you procure it from. If it is a GM Part # and has a cost in your DMS then you need to charge it out with the cost in your DMS and the difference whether positive or negative be debited or credited to 68700.

[Zep33]

Changing the cost at a GM store can also get parts to "fail the GM price filter" and count against you in the Sales Loyalty program

[steve@gmdealer]

If you sell warranty parts at cost +, you are screwing yourself by nt using the 687 account.

[cville1987]

I only change cost when I am selling an engine, transmission or transfer case that I bought below cost from a big dealer in order to be able to be competitive and make the sale. Under any other circumstances, all discounts go to 687. If I buy out a part for a CP or internal ticket, then I change cost to reflect the extra 15% I paid. I haven't had any problems with any of the above expamples with parts failing the price filter. GM did give us margin of wiggle room to change cost.

[Zep33]

I only change cost when I am selling an engine, transmission or transfer case that I bought below cost from a big dealer in order to be able to be competitive and make the sale. Under any other circumstances, all discounts go to 687. If I buy out a part for a CP or internal ticket, then I change cost to reflect the extra 15% I paid. I haven't had any problems with any of the above expamples with parts failing the price filter. GM did give us margin of wiggle room to change cost.

Yeah, I think the wiggle room is 20%

[PartsPlant81]

If you sell warranty parts at cost +, you are screwing yourself by nt using the 687 account.

Warranty sales are handled a little different when you procure the part from another source (ie. other dealer, warehouse) GM will pay the difference. We have a 'parts expedite' tab setup under the misc. area in our RO to charge out the difference then we put that difference to 24600 in accounting to be reconciled.