Reconciling Tire Inventory

Reconciling Tire Inventory

Postby Fixed Ops Mgr » Fri Nov 12, 2021 2:24 am

I am trying to figure out a problem with our tire inventory account as it pertains to my physical tire inventory on hand quantity vs what is showing in the accounting office GL. Our tire inventory value account #243 keeps on increasing higher and higher month after month in accounting however I am not purchasing more and more tires for in stock every month. From my view as parts manager, it seems like something in accounting is not reconciling or balancing out correctly but I am unable to figure out what may be happening and why? I don't believe that the accounting office is reconciling the tire account #243 on a regular basis and I think this may be a problem but I cannot make any headway with the office to help get this figured out.
Can anyone verify that the tire inventory account needs to be reconciled to be accurate and how is this done? Does the tire account #243 work differently than the #242 parts account as it pertains to the GM financial statement accounts? I have looked to see how our accounts are setup and we have a cost of sale account #690 and a sale account #490 where the debits and credits post when a repair order with tires on it closes and our tire inventory account is #243
In summary if I see debits and credits coming into the 490 and 690 accounts as we sell the tires, then why does our tire inventory account 243 value keep growing and growing? The value of 243 should not keep increasing every month and never decreasing or staying the same. I have verified that all of our tires are being costed properly and also verified that we are being billed correctly from GM. I also verified that there is not a theft problem happening either.
Any thoughts or suggestions would be greatly appreciated if anyone could reach out or advise me on this problem.
Fixed Ops Mgr
 
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Re: Reconciling Tire Inventory

Postby imacdude » Mon Jan 24, 2022 5:31 pm

Can you tell me the DMS system that your store uses?

If it is CDK, then your issue is more than likely the result of improper "Source Accounting", or parts sourcing. There are several places that have to be considered when setting up source accounting. On the Parts Logon, there is OSSA, and the Service Logon, function USA.

Assuming that you are ALWAYS making sure that the tire is sold from the tire source, OSSA will have to reflect a tire sale account for each parts sale type that doesn't use the DEFAULT setup. In service, USA needs to be setup to reflect the correct TIRE sale account for every labor type that doesn't use standard.

What I see most often, is that a labor type has been setup with a HARD coded parts sale account, and not SRC. When that happens, only that account will be used, so even is you sell a part, a tire, or bulk oil, it will only use that one sale account, relieving the wrong inventory account. I use SRC for everything!

I have some good reference material if you want it?

Also... make sure that accounting has chained all the TIRE sale accounts to properly relieve, the tire inventory. some may have been setup to relieve standard parts inventory.

If not on CDK, then the principals are the same, but the setups may be different
John Belen
Applications Manager
Asbury Automotive Group

The views and opinions expressed in my posts, are my own and have not been reviewed or approved by my employer, and do not necessarily represent the views and opinions of my employer.
imacdude
 
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