Aaron,
We have customer supplied parts from CustomerABC. We label each of these parts as "C-..." in our system. This way we can tell immediately what is a "C-" (ie. Customer supplied part) in our system. CustomerABC is also VendorABC in our system. When we need parts from them, we issue a $0 PO to VendorABC. Then when we ship the final assembly back to them, we ship it to CustomerABC. I have no clue how ABC keeps track of what they need, but that's not our concern in this case.
Troy Funte
Liberty Electronics
We have customer supplied parts from CustomerABC. We label each of these parts as "C-..." in our system. This way we can tell immediately what is a "C-" (ie. Customer supplied part) in our system. CustomerABC is also VendorABC in our system. When we need parts from them, we issue a $0 PO to VendorABC. Then when we ship the final assembly back to them, we ship it to CustomerABC. I have no clue how ABC keeps track of what they need, but that's not our concern in this case.
Troy Funte
Liberty Electronics
----- Original Message -----
From: Aaron Hoyt
To: 'Vantage E-Group (E-mail) ' (E-mail)
Sent: Tuesday, March 26, 2002 8:39 AM
Subject: [Vantage] Accounting, cost, inventory question.
I will try to explain this to the best of my ability so that those of you
that know can offer sensible suggestions.
Basically we have this. Customer ABCompany needs us to keep more inventory
than we can afford. Solution has been to sell our current inventory to them
including raw material, parts, and assemblies. Then we use these now
"customer supplied parts" (no cost to us anymore) to assemble the final
product that we sell to them at a reduced price to reflect the parts that
they supplied to us (paid for in advance). This continues having them pay
the vendors directly for the raw material/subcontracts as the costs are
incurred providing us with more "customer supplied parts".
If I have explained this right, you can imagine the confusion this causes
because the POs are still entered through Vantage and then when the parts
arrive the Customer pays the Vendor.
Management seems to like this arrangement and has begun this with Customer
YZCompany as well.
My question is, are we the only company in the world with this complex
process and if not, how are others handling the inventory and cost
accounting portion of this. I am rather certain that I would get a huge
backlash from the accounting community if I were to explain the method that
is being used here now. Could anyone offer a suggestion on a method? For
instance, ship the parts to the customer upon receipt and receive them back
as customer supplied? I have my thoughts, but know that my opinion will not
carry much weight.
Anyone that can offer suggestions???
Aaron Hoyt
Information Systems Manager
Design Standards Corp.
PO Box 1620
Charlestown, NH 03603
Tel 603-826-7744
<mailto:aaron.hoyt@...>
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