Vehicle for sale

Recently our company has started selling vehicles. I need to set up each vehicle as a cost object (I say cost object because I have considered doing and inventory item or perhaps a project) that needs to have the ability to have costs added to it such as any mechanical repairs, cleaning, specific advertising costs and any other enhancements. Would someone know how I can achieve this. I am using Sage 2016 premium. Thanks for any suggestions.

  • 0
    If you choose to use inventory items, you probably should create a new item for each vehicle, and use the inventory functionality (adjustments, item assembly, or a Purchase Invoice) to add your work order costs / internal services.

    You could use Serial Number tracking, but unless you're disposing of a fleet, you likely won't have identical items anyway.

    You could use Projects, but be aware that Projects are a reporting tool only. If you wanted to keep track, and report, on which manufacturers / vehicle models you were buying / selling, Projects could work as a tracking method.

    I don't know enough about the specifics of your business - it depends on a lot of things, including the volume that you will be handling. You may want to discuss this with a Sage Certified Consultant or your Accountant before heading off in a direction that could become a dead end.
  • 0 in reply to RandyW
    Thank you for your suggestions, they are very much appreciated. I think I can make it work using the strategies you suggest.
  • 0
    are you expecting the extra costs to be included in cost-of-goods when you sell the car ?
  • 0 in reply to Roger L
    Thank you for the response Roger L, yes I would like the extra costs to be included in the COGS rather than a general expense.
  • 0 in reply to SoccerDave

    Create a cost of goods sold account, say ‘vehicle resale costs’ to track any service costs
        Allow project allocations

    Create an inventory asset account called ‘inventory – cars’
        Allow project allocations

    Make sure the regular inventory asset account allows project allocations
        
    Create a cost of goods sold account, say ‘inventory car costs’
        Allow project allocations

    Use the VIN (or part thereof) as an identifier

    For each car
        Create an ‘in progress’ project called Project {vin}

        Create an inventory item called Car {vin}
            Asset account = ‘inventory – cars’
            COGS account = ‘inventory car costs’
            Variance account = ‘inventory car costs’

    When you purchase the vehicle, record the project on the purchase invoice

    When you purchase stock items to repair the vehicle (batteries, mufflers, etc), record the project on the purchase invoice

    When you purchase services for the vehicle (cleaning, advertising, etc)
        record the project on the purchase invoice
        the account will be ‘vehicle resale costs’ created above
        
    You can get a list of current costs by running ‘Reports, project, allocation’ for car {vin}

    When the vehicle is ready for sale, this report will itemize the vehicle assembly to create
        Create an inventory item called Vehicle {vin} – this is what we will sell
            Asset account = ‘inventory – cars’
            COGS account = ‘inventory car costs’
            Variance account = ‘inventory car costs’

        Under the ‘build’ tab,
            build one item
            add all the inventory items from the report, with quantities used
            set additional costs to match the ‘vehicle resale costs’ on the report, recorded to the ‘vehicle resale costs’ account
                this will credit the vehicle resale costs, resulting in a net 0$ balance

    under inventory & services, build vehicle {vin} from item assembly
        build from bill of materials
        item to build = vehicle {vin}
        quantity = 1
     
    When you sell the vehicle {vin}, record the project (car {vin})

    The project income report will show all revenue and expenses.