Franchise Data - Flipbook - Page 125
STEP 8
The selection of Estimated or Fixed costs has important accounts implications. When a vehicle
is sold, in the month it is sold, all the income and all the costs are automatically taken to the
Profit & Loss Account. Some of the costs relating to the vehicle may not have been processed
by the end of the month and so the system accrues for the outstanding costs until the actual
cost is processed.
Fixed Costs
If a cost is set to Fixed then when a vehicle record is set to the Accounts status of Invoiced and
all the costs are pulled through to the Profit & Loss Account the system will take the 8estimated9
cost through to the cost of sales accounts. Irrespective of the 8actual9 cost for the goods being
processed, the system will treat the 8estimated9 cost as the 8actual9 cost and a reserve for the
8actual9 cost is created in the balance sheet (the 8actual9 cost of the goods will be processed to
this balance sheet account).
If the 8actual9 cost is the same as the 8estimated9 cost then the system will only need the invoice
for the cost to be processed and no further work will be required. If the 8actual9 cost is different
to the 8estimated9 cost the difference is not transferred to the Profit & Loss. An adjustment for
the differences is normally done by the Dealer Accountant but it is not analysed by vehicle.
Usually, the 8small9 cost items are treated as fixed cost so that the processing in the purchase
ledger is minimised. Each cost line on a vehicle record which is an 8estimated9 cost will need
an invoice processed against it. If the cost for fuel is (say) £5.00 per vehicle it would be time
consuming to process a cost of £5.00 against each vehicle. Treating the fuel cost as 8fixed9
allows the total fuel bill for all the vehicles sold to be processed on one line to one nominal
ledger account rather than one line per vehicle. Any difference between the actual amount of
fuel invoiced and the fuel the system thinks has been used on each vehicle sold will be sorted
manually by the Dealer Accountant.
Estimated Costs
If a cost is set to Estimated the system will automatically adjust the Profit & Loss accounts
where the 8actual9 cost of the option is greater than the 8estimated9 cost of the option. This
adjustment is done automatically by the system as soon as the 8actual9 cost is processed onto
the system (usually through the Purchase Ledger module), provided the vehicle record is at or
beyond the Accounts status of Invoiced.
If the 8actual9 cost is less than the estimated cost the system will not make an adjustment to
the Profit & Loss accounts until the 8estimated9 cost is changed to the 8actual9 cost on the
vehicle record in the VSB module. Reports will need to be run to identify these differences.
Estimated Versus Actual Costs Report
A report is run as part of the Timed Operations to compare the 8estimated9 costs with the
8actual9 costs for each cost line on each vehicle record. The report can be run manually from
the VSB module / Reports & enquiries / Accounts reports / Profit & debtors reports / Estimated
vs actual costs. It is important that the estimated costs are adjusted to the real costs so that
the vehicle record can go to closed status.
STEP 9
The Notes tab can be used to record any specific information regarding the option.
STEP 10
The Picture tab can be used to link a picture of the specific option which can then be used in
the Showroom module.
Click OK to save the details and to continue.
Build Specification Creating Non Recoverable Options
03.005.08 L1 – gpl 01/07/08
Page 125 of 176
