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Posted by S And W

Dealing with Part Exchange

Hi. We are a business that often deals in part exchange.

If we agree to sell a customer an item for £1000 and give him £100 for an item he is trading in, then we know that the VAT rules are that we need to treat this as two separate transactions: a sale of £1000 (for which we are liable to 20% VAT), and a purchase of £100 (which we cannot claim VAT back as our customers are nearly all non VAT registered).

In the actual sale the customer will pay us £900 by credit card. But we need to enter a sale of £1000 through Easify, giving him his £1000 Easify till receipt, AND enter a purchase order to him for £100, and give him the purchase order 'paid' invoice. (We will have created a supplier called 'Trade in from customer' in Easify).

One problem this seems to us to create is when we look at our weekly cash up, we will find that the total of the sales orders for that week will no longer be equal to the takings in the till, because of the trade in values. Any ideas or examples of how best to make this work simply?

Regards

Mike

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Posted by Alison

Re: Dealing with Part Exchange

Hi Mike

We've been working through few scenarios but MTD makes it more complex - do you use Easify to file your VAT returns via MTD?

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Posted by S And W

Re: Dealing with Part Exchange

Alison said:

Hi Mike

We've been working through few scenarios but MTD makes it more complex - do you use Easify to file your VAT returns via MTD?

Not yet, but we will eventually.

Cheers

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Posted by Richard

Re: Dealing with Part Exchange

Hi Mike,

Do you process your sales using the Point of Sale in Easify, or through the back-end (Orders & Quotes / Purchases Windows)?

Or a combination of the two?

Regards - Richard (Easify Developer)

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Posted by S And W

Re: Dealing with Part Exchange

Richard said:

Hi Mike,

Do you process your sales using the Point of Sale in Easify, or through the back-end (Orders & Quotes / Purchases Windows)?

Or a combination of the two?

Combination of the two. But if one way is better, we can use that 100%

Ta

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Posted by Alison

Re: Dealing with Part Exchange

Hi Mike,

You could open a new account for Part Exchanges (you can do this under Finances/View Accounts).

Then if you use the back end (though the Order and Quotes window) to take the payment - You would raise the order as normal, but when taking payment you put through the £900 as credit card and then the £100 against the part exchange account. (note, you have to have Advanced Payment Mode showing under the Take Payment window to do this).

Alternatively if you wanted to use the POS you could enter the Part Exchange element as 'Other' (if you don't currently use 'Other' for anything specific. You could then route 'Other' payments to the Part Exchange account. (you can set up Payment Routing under Tools/Options/Finance.) When cashing up the POS the part exchange payments will show under the 'Other' column.

I've looked through the various reports and the full amount of the order is shown for accounting and VAT purposes so I think this is the best solution.

It would allow the payments in the till to be correct when cashing up whilst showing the full amount of the sale on the various sales reports and in the cashbook. Plus on the till receipt it shows that £900 was received by card payment and the other £100 was by other payment.

Hope this helps.

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Posted by S And W

Re: Dealing with Part Exchange

Hi Alison

Thanks for your help - we'll try out creating the 'Part Exchange Account'. Seems a sensible way to manage it.

Mike  

Alison said:

Hi Mike,

You could open a new account for Part Exchanges (you can do this under Finances/View Accounts).

Then if you use the back end (though the Order and Quotes window) to take the payment - You would raise the order as normal, but when taking payment you put through the £900 as credit card and then the £100 against the part exchange account. (note, you have to have Advanced Payment Mode showing under the Take Payment window to do this).

Alternatively if you wanted to use the POS you could enter the Part Exchange element as 'Other' (if you don't currently use 'Other' for anything specific. You could then route 'Other' payments to the Part Exchange account. (you can set up Payment Routing under Tools/Options/Finance.) When cashing up the POS the part exchange payments will show under the 'Other' column.

I've looked through the various reports and the full amount of the order is shown for accounting and VAT purposes so I think this is the best solution.

It would allow the payments in the till to be correct when cashing up whilst showing the full amount of the sale on the various sales reports and in the cashbook. Plus on the till receipt it shows that £900 was received by card payment and the other £100 was by other payment.

Hope this helps.

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Posted by S And W

Re: Dealing with Part Exchange

S And W said:

Hi Alison

We have set up an account name 'part exchange'. When we are processing this through the 'Orders & Quotes' module, then we also need to enter 'account type'. I am still a little confused as to how I should define 'account type'. Would we create a new account type too?

Mike

Alison said:

Hi Mike,

You could open a new account for Part Exchanges (you can do this under Finances/View Accounts).

Then if you use the back end (though the Order and Quotes window) to take the payment - You would raise the order as normal, but when taking payment you put through the £900 as credit card and then the £100 against the part exchange account. (note, you have to have Advanced Payment Mode showing under the Take Payment window to do this).

Alternatively if you wanted to use the POS you could enter the Part Exchange element as 'Other' (if you don't currently use 'Other' for anything specific. You could then route 'Other' payments to the Part Exchange account. (you can set up Payment Routing under Tools/Options/Finance.) When cashing up the POS the part exchange payments will show under the 'Other' column.

I've looked through the various reports and the full amount of the order is shown for accounting and VAT purposes so I think this is the best solution.

It would allow the payments in the till to be correct when cashing up whilst showing the full amount of the sale on the various sales reports and in the cashbook. Plus on the till receipt it shows that £900 was received by card payment and the other £100 was by other payment.

Hope this helps.

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Posted by Alison

Re: Dealing with Part Exchange

Hi Mike, I think the account types are hard coded so you wouldn't be able to add a new one.

I would suggest using Cash Account type for it .

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Posted by S And W

Re: Dealing with Part Exchange

Thanks Alison - will try that  

Mike

Alison said:

Hi Mike, I think the account types are hard coded so you wouldn't be able to add a new one.

I would suggest using Cash Account type for it .

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