A Usage Item is an item that has a per unit fee usually in addition to rental fees. To use the Usage Item feature, setup the item with Item Type of Rental – Usage. You will notice that four new fields appear below the Period and Rates sections: # readings, free units, +/- max, and each unit.
1. The field “# readings” is the number of readings taken each time this item is rented. For example most stores measure diamond blades 3 or 4 times and record the average. Where as mileage and helium are read just once.
2. The field “free units” is the number of free units given per day with a unit being the base charge such as 1 mile, 1 thousandth, or 1 pound.
3. The field “+/- max” is the maximum reading allowed and also indicates whether readings should get larger or smaller with use. Suppose a Diamond Blades maximum reading is 900 thousandths and the readings get smaller with use. Therefore, we would enter “-900”. As mileage is used it gets larger. If the odometer maximum is 99999 we would enter “99999”.
4. The field “each unit” is the charge for every unit used. Note: Usage items only have 7 definable rental periods instead of the standard 10.
Next you need to setup the Usage parameters under Rates in the Parameters. These numbers determine how many free units are given per hour, per week, and per month. These parameters are only used if you are giving free units. If the “free units” field in the item record is 0 then these parameters are ignored. For example:
6 hours, 3 days, 3 weeks - For every hour charged in rent on a usage item, give the customer 1/6 of the free units allowed per day. For every day charged, give the customer the number of free units per day as defined in the Item record. For every week, give the customer 3 times the number of free units per day. And for every month, give the customer 3 times the number of free units per week (i.e., 3 x 3 x free units per day).
0 hours, 5 days, 4 weeks - The customer gets 0 free units for each hour charged, but will get the number of free units per day for each day charged. For every week, give the customer 5 times the number of free units per day. And for every month, give the customer 4 times the number of free units per week (i.e., 4 x 5 x free units per day).
0 hours, 0 days, 0 weeks – This is most commonly used setting. The customer gets only the defined number of free units per transaction. He will not receive any more free units the longer he has it.
Examples:
Suppose Joe rents a Diamond Blade with free units = 6, per unit = 400, and the Usage Parameter = 6 hours, 3 days, 3 weeks.
Joe is charged 1 day rental and uses 4 thousandths. He doesn't have any usage charge since he receives 6 free units with his rental.
Joe is charged 1 day and 2 hours and uses 10 thousandths. He receives 8 thousandths free (6 per day + 2/6 x 6 per day), so he has to pay for 2 thousandth at the rate of $4.00 per thousandths, resulting in a wear charge of $8.00.
Joe is charged 1 week and 1 day and uses 30 thousandths. He receives 24 thousandths free (3 x 6 per day + 6 per day), so he has to pay for 6 thousandths resulting in a wear charge of $24.00.
When the usage item is rented out, the counter person will be asked to enter the current reading(s). The computer will then average the reading(s) and prompt you to accept the average reading(s). The average reading when the item was last returned will be the default.
Usage items create two line items on the contract. One for the rental of the item and the other for the sale of the per unit usage. The two line items are integrally connected (i.e., you can't delete one line item and leave the other). If you don’t want to charge for rental and/or sale just change the price to 0 instead of trying to delete the line item.
Upon opening, the quantity of the sale line item will be equal to the number of free units allowed for the specified time period. You can't directly change the quantity of the sale line item. If you try to change the quantity, it will force you to enter the reading(s). This is to insure that the proper reading is held in the item file. Also the quantity of the sale line item will always be greater than 0.
Upon closing the usage item, the counter person will again be prompted for the current reading(s). If a usage item reading should decrease when used and the average IN reading is greater than the average OUT, the reading will not be accepted, and the average IN reading will default to the average Out reading.
The quantity of the sale line item is equal to the total number of units used. The price of the sale line item will be equal to the total number of units used minus any free units given times the charge per unit. The total income from the sale and the rental will be included in the Item Income figure. The rental line will be included in the rental totals and the sale line item will be included with the sales totals.
Notes:
a. Each Usage item must be individually listed in the inventory (i.e., quantity = 1). If you have several diamond blades, each one must have its own key (i.e., DB12-1, DB12-2, etc.).
b. The Item Type must be Rental – Usage.
c. If you change the quantity of the sale line item while the rental line is still open, the OUT unit reading will be changed. If you change the quantity of the sale line item while the rental line is closed, the IN unit reading will be changed.
d. The average unit reading will be printed on the contract above the rental prices when a Usage item is opened and when it is closed. After the Usage item is closed, the unit reading will not appear on subsequent printings of the contract because the program does not retain that information.
e. Both the rental line item and the sale line item have the same taxable setting. In other words, if the item is non-taxable, both the rental and sale will be non-taxable. Note this does not affect the Tax Jurisdiction. If the Tax Jurisdiction you use has 0% tax on rental and 6% tax on sales, then the rental item would be tax free.
f. You should add a line in the Print Out notes stating the charge per unit and the number of free units per day.
g. The sales price of a usage item defines the maximum amount to charge. For example, if you put $300.00 in the sales price field and someone has a usage charge of $400, the computer will only charge $300. Note: If you do not want a maximum then leave the sales price blank.