Re: producing product for lease -- BPCS-L

There are really several parts to your question:

1. Moving the items, which I presume is some type of equipment, from your
inventory account to a fix asset account.
You could trig a G/L transaction based on an Inventory transaction.  If you
want to use more BPCS front door capabilities, you could create a special
Order Type and enter an order in which your company itself would be the
ordering customer.  When invoiced, that Order Type would call a CEA model
that instead of debiting A/R would debit your Fix Asset account.
You should also credit some special account other than the regular sales
account since you are not actually selling the item. In a regular sales
transaction, when we ship the item we relieve the inventory against Cost of
Sales, in this case the model would have to call this special account.  In
this way, once the equipment is shipped and billed, this special account
will be balanced out.

2. I would then create a Non-Inventory item in the Item Master (Item type
6), call Leasing.  You might want to create one per Customer contract, but
they would all be the same Item types.
I would then enter a Customer Order for the leasing in which the quantity is
the amount of the contract and the price is 1.00. At the end of every period
I would "ship" against that order the corresponding "quantity" for that
period, leaving an open balance for the remaining "quantity" in the
contract.

3. Every year, you would depreciate your fix assets, debiting depreciation
and crediting the Fix Asset account.

4. At the end of the contract, the quantity open in the Customer Order (Step
2.) will be 0.  Your revenue will be represented in each period by your
"sales" of  "leasing product".

Regards,

Ruben A. Mirensky

----- Original Message -----
From: Chick Doe <Cdoe@barton-instruments.com>
To: <BPCS-L@midrange.com>
Sent: Wednesday, November 08, 2000 5:49 PM
Subject: producing product for lease


> our company normally manufactures products and sells them to our
customers. there is a normal customer order and the sale results in an
invoice. in the ledger the sales and accounts receivable accounts are
updated with the sales dollars and the inventory and cost of goods sold
accounts are updated with the product cost dollars.
>
> we now have a new contract where we will manufacture product to a customer
specification, but we will not sell the end product to the customer. instead
we will retain ownership of the product and lease it to the customer. we
will need to generate monthly lease invoices instead of a single sales
invoice.
>
> does anybody have any experience with bpcs and this type of contract?
>
> some of your questions are:
> do we keep the value of the product in inventory, or do you transfer it to
fixed assets and depreciate it?
> how do you get bpcs to generate monthly lease invoices? to make it even
more difficult, product can be shipped to different installation locations
and we need to send a separate lease invoice to each location that we have
shipped product to.
> how does this type of arrange affect traditional P&L reporting?
>
> this may be a bit much to ask, but any thoughts, experiences, or
suggestions that you have would surely be appreciated. or bpcs version is
V6.04 mixed mode.
>
> chick doe
> barton instrument systems
>
> voice (626)937-0395
>
>
>
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