Peak has received reams and reams of paper regarding the new FOC Warranty Parts system but, after much discussion, has determined that the majority of the changes are procedural and do not require many changes to the software.

This document sets out our recommendations for processing this new system and lists the changes we are making to the software to facilitate easier reconciliation.

There is no change to the Parts Ordering procedure.  Processing a Warranty Job, other than issuing parts at cost + handling charge, is also unchanged.  For users not utilising this function, the set up is detailed in the next section.

The Software includes:

• An extra field in the Product Groups for GRNI (Goods Received Not Invoiced).  When goods are booked into stock in the parts module, the value will write to the Stock nominal (DR) and the GRNI nominal (CR). When the invoice is processed via the Purchase Ledger the value will write to GRNI (DR) to balance this account. Differences in the booking in value and invoice value should be dealt with as per your current procedure.
• Ability to enter a narrative line on a sales ledger posting either in Misc. Postings or Receipts.
• Nominal Ledger analysis on Miscellaneous Postings in the sales ledger, with narrative entry against each line.
• Parts ‘Monthly Issues Analysis’ report to be amended to include all WIP parts issued and not invoiced, regardless of the date of issue.
• Change to composite to encompass the new box code for the ‘Parts Warranty handling fee.
• Purchase Order print to show values of Each cost and Total cost.

New Balance Sheet account codes for the Nominal Ledger are required for the following:

• GRNI (Goods received not invoiced) – to be inserted into the parts product groups.
• Warranty Credit Note Clearing Account
• Warranty FOC Parts Clearing Account

Warranty Parts at Cost Setup

Go into Parts Management Parameters and into Amend Discount Codes. In here select the correct Franchise/s (Skoda/Seat) and then amend the Sales Discount Codes and set them to the percentage for cost plus mark up using the minus symbol. This will need to be done for all the Discount Codes under the relevant Franchise/s. 

In the above example, any parts issued against this warranty account will be issued at cost plus 7.5%. The 7.5% is the handling charge allowed by the manufacture.

Parts Procedures

• There is no change to the parts ordering system except a recommendation to print and keep the order as a record for possible value queries.
• Issue warranty parts to workshop jobs at cost + handling fee.
• Book parts in as normal.  DO NOT change the cost price of the FOC parts to zero.
• As the value of the parts booked in will now write directly to the accounts, please ensure that the current cost price is entered correctly.

• Parts issued to jobs at cost + fee, when invoiced the cost will be Cr from Stock and Dr to COS.  This will net a gross profit of the handling fee.  The Mechanical Warranty Sales and COS nominal codes (from the franchise product group) should be attached to the new composite box code.
• Goods receipts will now write to the nominal ledger as Stock Dr / GRNI Cr.  When the invoice is posted against the purchase order as now, the transactions will be GRNI Dr / PL Creditors Cr.  Any differences between the cost at goods in and the invoice cost should be dealt with as per your current procedure, but should be posted to the Stock nominal account code.

Workshop Procedures

• Process the warranty job as usual on the Peak System.  This invoice must include VAT.
• Follow the Skoda/Seat instructions for processing your warranty claim.

• The Parts Issues Analysis report will now report WIP parts from the jobs file and not the parts movement file, thus reporting on all issued/not invoiced parts

Sales Ledger Procedures

Below are the procedures for clearing the warranty invoices raised by the workshop.  Many users currently contra the warranty credit notes from the purchase ledger to the sales ledger as a lump sum.  With the new FOC parts it will now be easier to reconcile if the credit notes are posted to the sales and purchase ledgers rather than doing the contra.  The new facility of a narrative line (20 characters) on miscellaneous postings and receipts will aid reconciliation. This narrative line will also transfer to the nominal ledger.

NOTE: The VAT content of all invoices and credit notes should be shown separately.

As an added feature the following will be transferred as the narrative on all sales ledger invoices:-

     a) Workshop Invoice           -        Job number/Registration Number

     b) Parts Invoice                    -        words ‘Parts Invoice’

     c) Vehicle Finance D.Note  -        Registration Number

     d) Vehicle Bonus D.Note    -        Registration Number

     Note:  These narratives will not at present transfer to the historical data file.

• The warranty invoice will write from the workshop to the Warranty sales ledger account as normal.
• When the Warranty Credit Note is received, post as a credit note to the Warranty sales ledger account.  For easier reconciliation, the credit note could be broken down into 1 credit note per claim/invoice.  The credit note(s) should be posted to the Warranty Clearing nominal code. Differences on invoice versus credit for labour, handling fee, sublet etc., should be dealt with at this stage.
• When the Parts Sale Document is received, post the FOC parts entries as credit notes on the Warranty sales ledger account to the Parts FOC Clearing nominal code. Again individual entries will facilitate easier reconciliation.
• Use zero receipt to clear completed entries.

Purchase Ledger Procedures

Reports