Overview: Often times when expensive inventory is purchased the vendor does not charge interest or require payment for a certain amount of time. This is called floor time and allows the person time to sell the item and use the income to pay for it rather than pay interest right off the bat. This also encourages a company to maintain a larger inventory. This guide covers how to handle data entry and sales of inventory from a vendor's floor plan if you are paying the vendor as the inventory is sold. This requires the use of the purchase order module and would be used for serialized sale items.
A category will need to be created for the floor plan items. If you have multiple vendor floor plans you should set up a category for each vendor. If you need to track the income from these sales in your accounting software then you should put in the appropriate GL number in the category income field and possibly the COGS field. Items you buy from this vendor and own will need to go into another category.
1. Create a category for a floor plan. If you have multiple vendor floor plans you should set up a category for each vendor. If you need to track the income from these sales in your accounting software then you should put in the appropriate GL number in the category income field and possibly the COGS field. Regular stock items will need to go into a separate category.
2. In File Maintenance create a record for each model or style of equipment you will sell. Set the type on these records to "Sales- Header". Be sure the items go into the category you created for this floor plan.
3. Once the items are in the database go into the Purchase Order module and create a PO for the appropriate vendor for those items that you are getting on this floor plan. Only put on those items that are part of the floor plan. Items that you are purchasing and will own should be purchased on a separate purchase order. You may want to make a comment in the purchase order notes as to the terms of the floor plan as a reference.
4. When the item(s) arrives at your store you will then receive the purchase order. This will create the serialized sales records. The sales header record of each item on the PO will go to zero and the serialized records will replace it for however many units you are getting as part of this order.
5. After receiving the items, un-receive the serialized items so that they go back to On Order status.
6. When you sell a unit, modify the PO and receive the unit and then do a ‘Line Item Receipt Breakout’ for the items in question. This will create a Closed Purchase Order, with only the items you have sold (this is your payable for your vendor). The unsold items will remain on the open purchase order to be processed as they are sold.
7. If at the end of your floor plan (usually 12 months) you have to pay for any unsold items you simply receive the balance of the Purchase order and put the items in stock and pay the bill.
8. Since there are items on the Purchase Order that have not been received POR will show that you don't have any of these in stock. But the items will be on order. So at the inventory screens turn on the "on order" column when looking for these items so you know what is on the purchase order and thus really in stock. As you put the item on the contract the system will tell you that you don't have any do you want to "process anyway?". Answer the prompts and sell the item. The item quantity will go negative. Once the purchase order is updated, the quantity will go back to zero, the purchase information will update, and the on order quantity will go to zero.
If the person doing the sale at the counter is not the same person adjusting the PO then a system will need to be put in place to notify the person who does receive the PO so this process can be completed. The Daily Category Income Report can be used to see if anything was sold in a category and/or look for negative quantities in a category in an inventory selection screen.