443 Promotions (Purchasing and Selling)

443 Promotions (Purchasing and Selling)

Purpose

From time to time Suppliers will offer a promotional campaign for consumers to purchase three tyres and get the fourth tyre at no cost (FREE!).

This document outlines the setup and operational procedures that should be followed so you properly account for the sales; reduced cost on the supplier account and ultimately the TRUE cost of the advertising and promotional campaign to your business.

 Setup of the Special Item

To correctly and easily account for the Sales & Credits related to this promotional campaign, you need to have a Special Item setup in COSTAR.

1.      Select Inventory

2.      Select Special Item Maintenance

3.      Click Add New

4.      Enter the code of 443

5.      Enter the description of Four for Three promotion

6.      Leave the price at $0.00

7.      Set the Sales GL to your Expenses code for Promotional Items (e.g. 42001)

Note: If you are a multi-branch business, please check with Microhouse Support to ensure this is setup correctly. 

Purchase of Inventory

This Inventory MUST be receipted as per normal and any difference in cost will be accounted for at this time using the 443 Special Item code.

 1.      Select Purchasing

2.      Select Purchase Orders

3.      Create a Purchase Order as per normal

4.      Enter the Inventory at the Standard Cost

5.      Set the Order Qty to the amount ordered

6.      Set the Receipt Qty to the amount ordered

7.      Enter the new 443 Special Item on the Purchase Order

8.      Set the Order Qty to -1

9.      Set the Receipt Qty to -1

10.  Set the Supplier Cost to the Standard Cost you have for the Tyre

 

11.  Enter the Invoice details and then receipt the Purchase Order

This has the effect of bringing in all 4 tyres at your Standard Cost but allocating the cost of 1 of these tyres to a Promotions General Ledger
 

Sale to Customers

Put simply, these are normal sales, with the exception that you are offering the customer a ‘Discount’ of 100% of the value of 1 of the tyres.

Generate your customer Repair Order as per normal, adding all of the products and services, then at the end of the Repair Order enter the Special Item ‘443’. (This will look very similar to how you prepared the Purchase Order). Set the Qty to -1 and set the Selling Price to the amount based on the selling price of the tyres that you are selling (see below).

 1.      Select Order Entry

2.      Select Repair Orders

3.      Open the Repair Order for the customer (existing or add new)

4.      Enter the items you are selling as per your normal sales process

5.      Enter the Special Item 443 and set the Qty set to -1

6.      Set the Selling Price to the value of 1 of the tyres sold (see below)

This will update all of your Sales Analysis with the correct figures and put the net value of the discount that you’ve given the customer into an expense line of your General Ledger.

 

 

 



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