If a second hand car dealer has a car for sale say £5,000. They sell the car for £4,000 and get a car in part exchange for £1,000. How do you put this on sage? Do I need to put the part exchange down as stock? But then how do I clear the customer account?
For anyone interested. I have ended up issuing a credit note for the amount of money they got for part exchanging their car. Therefore balancing the customer account - not sure if this is the most correct way? Any advice would be great.
From the perspective of the garage the PX is a sale and a purchase.
From the client perspective they receive money for their old car then give it back to buy the new car.
The px is simply offsetting one against the other rather than treating as as seperate transactions.
I can see no reason that your approach should not work but just thought that I would comment as you were probably feeling a bit ignored not getting a response all day (sorry, think that a lot of people (including myself) are quite busy at the moment so questions are not being responded to as quickly as normal).
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
There is a £5000 sale and a £1000 purchase as Shaun says. You could use a cash control account whereby you receive £5000 and pay £1000 and then you move the £4000 balance to either the bank or petty cash dependent how it was taken.
-- Edited by FoxAccountancyServices on Wednesday 4th of September 2013 09:19:55 AM
The issue of a sales credit note will cause complications if you are VAT registered, as it will reduce the value of sales, instead of increasing the value of purchases.. just a thought :)
By raising a credit note and posting it to whatever nominal account you use for purchases of cars then that will work. It may be a good idea to open a new nominal account and call it Part exchange Purchases but that wouldnt be totally necessary. Any credit notes that have been put against sales need to be journalled (debit purchases, credit sales). Don't forget that second hand car dealers must keep a log book of their purchases and sales and that when they are vat registered they use the Margin scheme, ie the vat is calculated on the profit,
