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Companies have a need to finance inventory purchases for items they want to bring into stock and display on their showroom floors, use as demo models or resell immediately. These items that are financed are tracked by serial number to keep an accurate accounting of them. Floor Finance Plans require payments as these specific serial numbered items are sold as the floor financing plan dictates. Therefore, an accurate status of each serial numbered item is important. A business owner needs to know of serial numbered items that are in stock, in stock and sold, delivered to the customer and financed, and if those items are accruing interest charges. The floor plan tracking screen displays all this information to the business owner. Flooring plans work by first defining Floor Plans and tagging Purchase Orders with the proper floor plans. Once inventory is received, serial numbers are recorded.
- If the floor plan indicates interest is based on the inventory receipt date, then free flooring begins as soon as the inventory is received. A vendor invoice must be entered once the inventory is received.
- If the floor plan indicates interest is based on the Invoice date, then free flooring begins now. There is a space available on a vendor invoice to enter the Notes Payable date.
- Notes Payable: A short-term obligation in the form of a promissory note to suppliers or financial institutions.
- If the floor plan indicates interest is based on the Notes Payable Date, then flooring began on the date specified in that field. This date may be a day or two before or after the Invoice date.
As this process occurs, the business owner can view this information using the Search Floor Plan Serial Numbers screen.
Step by Step:
Floor plan tracking/financing only works with serialized items-meaning items that are setup to track serial numbers on receipt.
The setup required for flooring is as follows:
Step 1: Make sure appropriate items are marked to track serial numbers on receipt
Step 2: Create Floor Plans.
a. Open the Floor Plans tab on the Accounting Setup screen (Administration > Accounting > General Setup > Flooring Finance Plans).
b. Click Add. The Floor Plan screen appears.
c. Floor Plan Name - Enter the name of a floor plan, for example, GE Capital 90 Days Free.
d. Vendor - Select the vendor that offers the plan.
e. Click Add New Vendor to create a new vendor.
f. Calculate Based On - Select the date used to begin calculating interest.
g. Free Days Before Interest Starts - Enter the number of free flooring. This is the number of days before interest starts to accrue on the item.
- For example, if the flooring plan is calculated on inventory receipt date and you have 90 days of free flooring, you have 90 days from the date you received those items into inventory before you start accruing interest charges.
h. Click OK when complete.
- Once you create the flooring plan, you can add the it to purchase orders using the Profile tab of the Purchase Order screen (Administration > Inventory > Vendor Purchase Orders > Search New POs > Open a PO).
Step 1: Enter items on Purchase Order and select the flooring finance plan on the Purchase order. This is located on the profile tab of the purchase order. The purchase order is created for the vendor providing the product.
Step 2: Receive the items on the purchase order and you will see the serial numbers now appear in the Search Floor Plan
Serial Numbers screen under Administration>Accounting>Accounts Payable>Search Floor Plan Serial Numbers.
- Please note that the serial numbers will not be removed from this screen until you manually open the serial number,
mark it as paid, and enter the check number. Evosus will not automatically do this when you make a payment to the
Step 3: Create an invoice for the purchase order, remembering to mark the Note Payable date.
Step 4: As you cut checks to the financier, manually change the Serial Number status to flooring paid and record the check
Tracking the Payable
If you will not be receive funding from the financier and they are paying the Vendor directly, you can choose
the payable vendor as the financier and choose the item vendor as the vendor on the items tab.
- Remember that you can create a bill-inventory for a vendor different from the one who supplied the item.
- The payable will be tracked in the default A/P account and will show on the A/P Aging.
If you are receiving a check from the finance company and paying the vendor (i.e. Watkins) and need to
track the payable in a Notes Payable GL, and not the default A/P then you will need to:
#1 Receive the financing check into Make Deposits and choose the Notes Payable GL when the check is received.
#2 Cut a check from Pay Bills to pay off the Watkins invoice.
#3 Cut a check to the finance company as your terms dictate. When you cut the check you will manually alter the serial
number statuses and the check will be coded to the Notes Payable GL.
If you are receiving a check from the finance company and paying the Vendor (i.e. Watkins) and do not
need to track the payable in a Notes Payable GL but can track it in A/P:
#1 Receive the financing check into Make Deposits and use a liability or clearing account.
#2 Cut a check to Watkins using the same GL account in Step 1.
The inventory invoice in Evosus should be associated to the finance company just select the item vendor on the
items tab of the vendor invoice.
If payment is going directly from the finance company to the item vendor and you need to track the payable
in a notes payable GL account you should:
#1 Create the invoice for the item vendor and attach the items
#2 Close the invoice using a debit memo coded to your Notes Payable GL.
- As you cut checks to the financier, manually change the Serial Number status to flooring paid and record the check
- Floor plan tracking begins when an item is received on a purchase order where the purchase order has been
tagged with a floor plan.
- If you have posted item receipts for serialized items, these cannot be deleted so we cannot
edit the purchase order, re-receive, and initiate floor plan tracking.
What should I do if I forgot to mark the Purchase Order with the Flooring Plan?
Step 1: Delete the item receipt (assuming it hasn't been associated to a vendor invoice already)
Step 2: Edit the PO and tag the PO with the floor plan on the profile tab
Step 3: Re-Receive the items into Inventory on that PO and floor plan tracking will be initiated
*Note: Floor plans are used for Orders & Quotes. They do not function nor were designed to function with Job Costing.