Understaning parts accounting

[dixon]

At the risk of sounding like a complete idiot, is there a class or something I could take to help me understand this accounting stuff. For example, I would think that if you were to charge a part out on a r.o. that cost 100.00 and sold it for 110.00 that the 100.00 would go into your stock account "1400" and the 10.00 go into another account. I'm being told it all goes into 1400. I've been handed a position that I'm not ready for and could ready use some help.

[JGROSS1978]

$100 is relieving your parts inventory as well as the GL(accounting office) $10 goes to the account number your gross profit is linked to! I hope you make more than 10%...……

[LOKI1]

Go to your search engine and type in gm chart of accounts. This will help you but it's only the account #'s

[dixon]

Thank you both, the 100.00 was just an example lol. I will check out the chart of accounts.

[dixon]

It does not help any that they copied our ford store and we are using ford accounts for GM.

[PartsPlant81]

It does not help any that they copied our ford store and we are using ford accounts for GM.

Doh. Let me know how that works out for you lol.

The account #'s themselves don't matter in my example but for GM the $100 would go into 24200 and the $10 would go into 68700.

Find out your parts inventory account #, parts profit account # and sublet account #. Those are the 3 you will be using the most.

[greenthumb-38]

Actually, the figures are posted into more accounts than 242 and 687. And the profit comes from the difference of the sale amount and the cost of sales, not from an actual posting of the gross profit dollars for each invoice.

here is an example of a wholesale sale of a vacuum pump. GM#12669488.

-121.97 242 parts inventory
121.97 683 cost of sales - wholesale parts
195.16 204 parts cash drawer
-195.16 483 parts sales
If there was sales tax, then the 204 acct would go up and there would be an entry for 324 sales tax.

If your system has a print function of an office or audit copy of a parts invoice, you can see the accounting path. I would recommend looking at service ROs in an acct'g screen to confirm the correct accounting is being used for discounts and such.

- gt

[FixedManager]

The other accounts you see are how the data is sorted to help with other functions such as: end of day financial accounting, statement positioning, departmental recognition to name a few. I would guess you are on CDK as they have a Parts Manager tool that allows you to review how an invoice is accounted for. The NADA has courses that better explain the complete accounting set but it is too much to cover in a blog/forum.

As you are new to the Parts Management role I recommend you sit with your Office Manager or Comptroller and find the GL account codes needed to code all invoices. The obvious ones are inventory, freight, purchase adjustments, and purchase credits for all departments (not just the Parts Department). Others off the top of my head include: policy, postage, tools, advertising, supplies, manufacturers bonus and participation fees to name a few.

Good luck in your new role!