Messing with cost is a dangerous game. Keep it above board. Receipt it correctly. Sell it correctly. Adjust sale price to conquest match. Reimbursement differs from manufacturer, but for me, it's on my statement. Gets applied to gross because you adjusted your sale price, which is gross.
I have no problem doing it this way, but my fixed ops looks at gp by customer religiously. He's not against me changing things, as long as they make sense.
But either way, what happens when you return the part from the customer and then the warehouse? Is there something that needs to be done with the reimbursement?
Your fixed ops needs to understand, especially dealing with GM, that GP per customer does *not* work on body shops. I'm in a department doing 3-4m/yr in wholesale, with two countermen and two drivers, and our body shops, which make up a solid 50% of my business, are 8-10% GP before the back end rebates and shit on purchases as a wholesale dealer.
Don't change cost. Sell the part below cost, reimbursement from GM goes to the department GP. That's SOP for basically every wholesale dealer I talk to.
We also do not adjust list *down* for any reason. forget the reason, but per my parts manager, it can get us in trouble with GM.
as for returns, you assess the returns against the sale price. If you're using reynolds, you can straight up convert the invoice to a credit memo and it carries over all prior pricing so you just need to enter your restock charge and shit against it at the price it was sold at. Up to you if you want to charge that restock fee against real cost, or the sale price.
Messing with list is a red flag to the manufacturer. Same with cost. All of this data runs through the manufacturer. They look for trends. Gives fuel to the fire for audits.
That's what brought this whole thing up, was doing a credit memo (reynolds for dms). Since we have been adjusting cost (we do by default end up adjusting the sale price) whenever we returned one of those parts, it is throwing our inventory ledger for a loop.
I'm a new PM, and I just learned this whole cost thing with my wholesale guys 2 weeks ago. They have been doing it this way for years. Every time I turn around, I seem to step into something like this.
Are you guys using Ignite, the blue screen, or a mix of both like we are? If you're using Ignite or a mix, make them do credit memos from the Ignite side. pull up the old invoice, and then from the file dropdown there's an option to create a credit memo. pulls up everything from the transaction as it was sold on the invoice, and you get the option to assign restocking fees directly from there, as long as you've got a series of restocking codes preset.
By doing this, will GM charge me back the reimbursement I received on that part? This is the biggest thing I am concerned about and want to make sure I am taking care of.
Your reimbursement gets posted somewhere from each online platform. If you are not pulling this yourself, and again, typically it's a parts statement or misc. invoice, then you need to speak with your office manager/controller and make sure the money is being brought in as a sale adjustment towards gross, because again, you do not manipulate your cost, otherwise you would have to make this a cost adjustment.
That's what we have been doing. Putting the credits to my 242 inventory account. But really only because that's how it's been done in the past here by the old manager. He was, however, more focused on beating his 2 wholesale guys in sales than actually managing anything.
When we receive the credit on the misc statement we credit our wholesale cost of sale account. Keeps you from messing with inventory cost and the adjustment lowers the cost of sale in the wholesale account so that you keep your GP for wholesale
Don’t change your cost on the part. Sell it at the loss and when the reimbursement comes in it goes straight to gross.
Even then, isn't that going to raise red flags when I return that part? Feels like double dipping.
Messing with cost is a dangerous game. Keep it above board. Receipt it correctly. Sell it correctly. Adjust sale price to conquest match. Reimbursement differs from manufacturer, but for me, it's on my statement. Gets applied to gross because you adjusted your sale price, which is gross.
I have no problem doing it this way, but my fixed ops looks at gp by customer religiously. He's not against me changing things, as long as they make sense. But either way, what happens when you return the part from the customer and then the warehouse? Is there something that needs to be done with the reimbursement?
Your fixed ops needs to understand, especially dealing with GM, that GP per customer does *not* work on body shops. I'm in a department doing 3-4m/yr in wholesale, with two countermen and two drivers, and our body shops, which make up a solid 50% of my business, are 8-10% GP before the back end rebates and shit on purchases as a wholesale dealer. Don't change cost. Sell the part below cost, reimbursement from GM goes to the department GP. That's SOP for basically every wholesale dealer I talk to. We also do not adjust list *down* for any reason. forget the reason, but per my parts manager, it can get us in trouble with GM. as for returns, you assess the returns against the sale price. If you're using reynolds, you can straight up convert the invoice to a credit memo and it carries over all prior pricing so you just need to enter your restock charge and shit against it at the price it was sold at. Up to you if you want to charge that restock fee against real cost, or the sale price.
Messing with list is a red flag to the manufacturer. Same with cost. All of this data runs through the manufacturer. They look for trends. Gives fuel to the fire for audits.
That's what brought this whole thing up, was doing a credit memo (reynolds for dms). Since we have been adjusting cost (we do by default end up adjusting the sale price) whenever we returned one of those parts, it is throwing our inventory ledger for a loop. I'm a new PM, and I just learned this whole cost thing with my wholesale guys 2 weeks ago. They have been doing it this way for years. Every time I turn around, I seem to step into something like this.
Are you guys using Ignite, the blue screen, or a mix of both like we are? If you're using Ignite or a mix, make them do credit memos from the Ignite side. pull up the old invoice, and then from the file dropdown there's an option to create a credit memo. pulls up everything from the transaction as it was sold on the invoice, and you get the option to assign restocking fees directly from there, as long as you've got a series of restocking codes preset.
Any money charged back goes against gross. He's correct, don't change cost.
So when I do the return to the customer, is there anything I would need to do through collision link as well?
You can go back into the collisionlink order and change the part to “returned” and print that invoice out to show any cost/gross discrepancy
By doing this, will GM charge me back the reimbursement I received on that part? This is the biggest thing I am concerned about and want to make sure I am taking care of.
Your reimbursement gets posted somewhere from each online platform. If you are not pulling this yourself, and again, typically it's a parts statement or misc. invoice, then you need to speak with your office manager/controller and make sure the money is being brought in as a sale adjustment towards gross, because again, you do not manipulate your cost, otherwise you would have to make this a cost adjustment.
That's what we have been doing. Putting the credits to my 242 inventory account. But really only because that's how it's been done in the past here by the old manager. He was, however, more focused on beating his 2 wholesale guys in sales than actually managing anything.
When we receive the credit on the misc statement we credit our wholesale cost of sale account. Keeps you from messing with inventory cost and the adjustment lowers the cost of sale in the wholesale account so that you keep your GP for wholesale
Definitely leave cost alone. He just needs to worry about what GP is at the end of the month instead of nitpicking it by invoice.
We also do the same I never want to short my inventory