Month End

[stevejm71]

I have a question for everybody who does a month end reconciliation with accounting every month. If you have any returns that have dragged over from the previous month do you still add them to this months figures? My thought is that if it was accounted for the previous you should not include it in your totals again. Any thoughts would be greatly appreciated.

[PartsPlant81]

It's your discretion. I have copies of all of the pending credits I am waiting on and the office knows what I am waiting for.
They tell me when the credit shows up on the statement from the vendor.
When we have our annual physical inventory the inventory company inputs the pending credits in a spreadsheet and gets the dollar total $ so it is credited to our inventory value.
I guess it depends on how much you have pending and how accurate you want the number to be every month.

[Mike Nicholes]

If it is helpful, you can download a reconciliation procedure from www.partsconsulting.com; in the downloads. There is no cost or commitment and inquiries are not tracked.
Mike Nicholes

[stevejm71]

Thanks for the help!

[JeepGuy]

Yes you need to account for it on your side. Accounting office still has that dollar figure in your inventory on their side. The monthly reconciliation is a "snap shot" of where your inventory is at that given time which includes ALL outstanding credits. You do not include it after receiving credit and running the credit invoice through to the accounting office.

[Zep33]

Yes you need to account for it on your side. Accounting office still has that dollar figure in your inventory on their side. The monthly reconciliation is a "snap shot" of where your inventory is at that given time which includes ALL outstanding credits. You do not include it after receiving credit and running the credit invoice through to the accounting office.

This!!

(as long as you've removed the parts from your inventory)

I've heard stories of some parts managers not relieving their inventory until they received the credit. If you are one of those then you wouldn't reconcile it as it would still be part of your inventory.

[MSInventory]

This is an area where balances get screwy quite a bit. I see it all the time during physicals and most of the time can track it back to improper handling of returns -vs- the GL.

The easiest way I have found to assure that posting is accurate is to provide your accounting office with a copy of your monthly returns and have them set is up as a receivable. This way, it is accounted for no matter how long it takes to get the credits in and won't throw your month end reconciliation out of whack. When the credits come in, post them to the receivables and they'll be clear.

[stevejm71]

Would accounting accounting set up a receivables account for my aftermarket vendor returns?

[MSInventory]

Absolutely, especially if you are sure you won't be getting credit for it in the current month. I will say that I keep from having to do that by having my outside sources issue credits quickly so I don't have to set up the monies, but of course that doesn't always work out. It sounds like extra work for accounting but really it's not. They are going to have to punch it in at sometime. Makes monthly rec a little easier on us.

[Stevenspeaking]

In the past I have had to set up a customer number and created a parts invoice on returns to have better tracking of returns. The return receipt would be attached to the invoice with the return slip number as the purchase order. Also on factory returns it may help boost some sales numbers.


The first thing that was ever thought to me in this business was CYA. I feel it still hold true to this day.