Hi. I run a used car sales business through your system. Quick question. If i am trading in a car from a customer and let’s just say I’m charging them the balance to change from their trade in, to my stock vehicle. How do i allocate their trade in vehicle, at a stock value, when I am not outlaying the money from my bank account.
Perhaps open another dummy bank account and call it “Trade In” and tag amount to it.
e.g your stock car sale price is 1000 and trade in value for your customer car is 300, you create invoice for 1000 for customer and tag 300 paid in to Tade in a/c and balance 700 into main bank a/c. Now raise another purchase invoice for trade in car and tag it as paid from Trade in a/c
A £1,000 invoice is raised and you effectively make two payments against it. £700 is paid into your business current account, i.e. this is the cash value paid by the customer. Then you log a second payment for £300 to a dummy bank account called “Part-ex Vehicles” or something similar. That means you’ll get an accumulating balance on the dummy account for the value of the vehicles you’re taking in as stock. You can then post balancing money out entries on the dummy account to bring it back to zero and tag those to the “Stock” code.
Really struggling with this topic. I’ve only started properly trading cars in. Hoping that you can explain for me on the subject that follows. An example; I bought a vehicle into stock at a value, then I sold it to a customer and I accepted his trade in. The total value once I have sold his trade in equates to the value that I originally wanting for my stock vehicle. So im really selling 2 cars to get to my actual sale value. However, I need to show his trade in, in my stock also. How do i stock his trade in, if I’m not effectively out laying any money for it, if I do a purchase invoice for it? Then how do I also tag the money to the cars without showing a loss to the original car when really I’m getting what I wanted value wise for my stock vehicle? Hope this makes sense?!
However, I sold the stock vehicle for example £5000, allowed the trade in for £1000, once I sell the trade in vehicle that I bring into the system for the selling price £1000 and my money in is now £5000. This would mean that I need to stock the trade in at zero? Sorry, but im slightly confused !
You would have several invoices, similar to the guide I linked to above.
A sales invoices for the sale of the stock vehicle (£5,000).
A purchase invoice for the purchase of the vehicle (in this case, £1,000).
A sales invoice for the sale of the vehicle (you mentioned the same price, so this would also be £1,000)
Overall, the effect of the above is +£5,000. You would use the actual values you buy and sell the vehicles for. Even though you sold the vehicle for £1,000, which happens to be the same price you purchased it at, you would still need the records of £1,000 to show the actual transaction.