Rick,
It sounds like you are only talking about "customer" return transactions
which are handled by the RMA process. The only account I use is the "Cost
of Returns" account which is credited by INS-STK or INS-MTL, the
corresponding debit is inventory or wip material.
The only time the R & A account should be hit is during the invoicing phase
when the credit memo is created.
This because you really have two things you need to account for, the actual
cost of the item returned and the sales price of the item returned.
The sales side is what the customer sees by way of the credit memo:
Returns & allowances DR$$$$$$
Accounts receivable CR$$$$$$
The other piece is our material cost:
Inventory or WIP material or scrap DR$$$$$$
Cost of returns CR$$$$$$
The Cost of Returns is a contra to all your cost of sales accounts and
really represents the same thing only in reverse.
I hope this helps.
Ed
-----Original Message-----
From: Ludwig, Rick [mailto:RickL@...]
Sent: Wednesday, May 26, 2004 6:35 PM
To: vantage@yahoogroups.com
Subject: RE: [Vantage] QUALITY MODULE/RMA ACCOUNT SETUP
Edward-
I'm sorry - it's a "reverse sign" account (i.e. contra account) on my
financials so it does have a credit balance, which reflects as a positive
balance (i.e. additional sales) on the income statement.
What my question pertains to is what default accounts should be used in the
control accounts/reason codes. The way it works now is that when our
quality rep does an INS-DMR (scrapping the parts) - a debit to a "Cost of
Quality-DMR" account or INS-MTL (creating a rework job and moving the cost
to WIP) - a debit to "WIP-Material", the credit side of the transaction is
to "Returns & Allowances". These transactions, combined with the actual
credit memos she issues (a debit to "Returns & Allowances"/credit to A/R)
has resulted in a net credit balance to "Returns & Allowances". After
talking to our quality rep and having her explain her transactions, it
became clear to me that the debits to "Cost of Quality-DMR" should have
actually gone to the "Returns & Allowances" account. How do I correct this?
I guess I need someone to explain how quality/reject-related costs flow
through the system (I don't understand the purpose of the "INSPECTION",
"DMR", & "DMR-WRITE OFF" entries in the G/L control accounts setup - I've
got all three pointed to "Cost of Quality" overhead accounts). My
accounting knowledge would tell me to do the following:
1) receive parts back in and inspect (NO INITIAL ACCOUNTING ENTRIES)
2) if parts are O.K., ship back out, if not, place in quarantine area (1.
DR. QUARANTINE INVENTORY/CR. COGS or MATERIAL VARIANCE & 2. DR. RETURNS &
ALLOWANCES/CR. ACCTS. REC.)
3) either rework parts (DR. WIP/CR. QUARANTINE INVENTORY) and rebill once
completed w/ the rework-related costs being charged to a "Cost of Quality"
account or scrap parts (DR. COST OF GOODS SOLD or MATERIAL VARIANCE/CR.
QUARANTINE INVENTORY)
Please let me know where my logic is flawed and where I need to change my
setups so that the Vantage Quality Module works the "proper" way.
Thanks in advance for your assistance!
Thanks!
Rick Ludwig
-----Original Message-----
From: Edward F. Fox, Jr. [mailto:efox@...]
Sent: Wednesday, May 26, 2004 11:39 AM
To: vantage@yahoogroups.com
Subject: RE: [Vantage] QUALITY MODULE/RMA ACCOUNT SETUP
The returns and allowances is the sales amount from the credit memo. The
cost of the return should go to a contra-cos account. BTW what is a
positive balance? Do you mean a debit balance? The R&A account should have
a debit balance.
-----Original Message-----
From: Ludwig, Rick [mailto:RickL@...]
Sent: Wednesday, May 26, 2004 10:58 AM
To: Vantage@yahoogroups.com
Subject: [Vantage] QUALITY MODULE/RMA ACCOUNT SETUP
To all accounting gurus...
We began to use the Quality Module last month and I set up all the
control/default accounts how I thought they should be; however, when I
wrapped up my financials, I actually had a "positive" Returns & Allowances
account balance as a result of the INS-DMR (not reworkable) & INS-MTL (sent
to rework job) transactions!! (my true "Returns & Allowances" transactions
fell to an account "Cost of Quality-DMR" that I had established for the
additional costs to rework rejected parts)
Can any of you that are using the Quality Module walk me though how the
transactions are supposed to flow and suggest what control/default reason
accounts I should be using so that my financials are accurate in the future?
Sincerely,
Rick Ludwig
Vice President of Finance & Administration
Metal Spinners, Inc.
Angola, IN 46703
DIRECT (260) 665-2158 x25
FAX (260) 665-5327
Useful links for the Yahoo!Groups Vantage Board are: ( Note: You must have
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already linked your email address to a yahoo id to enable access. )
(1) To access the Files Section of our Yahoo!Group for Report Builder and
Crystal Reports and other 'goodies', please goto:
http://groups.yahoo.com/group/vantage/files/.
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It sounds like you are only talking about "customer" return transactions
which are handled by the RMA process. The only account I use is the "Cost
of Returns" account which is credited by INS-STK or INS-MTL, the
corresponding debit is inventory or wip material.
The only time the R & A account should be hit is during the invoicing phase
when the credit memo is created.
This because you really have two things you need to account for, the actual
cost of the item returned and the sales price of the item returned.
The sales side is what the customer sees by way of the credit memo:
Returns & allowances DR$$$$$$
Accounts receivable CR$$$$$$
The other piece is our material cost:
Inventory or WIP material or scrap DR$$$$$$
Cost of returns CR$$$$$$
The Cost of Returns is a contra to all your cost of sales accounts and
really represents the same thing only in reverse.
I hope this helps.
Ed
-----Original Message-----
From: Ludwig, Rick [mailto:RickL@...]
Sent: Wednesday, May 26, 2004 6:35 PM
To: vantage@yahoogroups.com
Subject: RE: [Vantage] QUALITY MODULE/RMA ACCOUNT SETUP
Edward-
I'm sorry - it's a "reverse sign" account (i.e. contra account) on my
financials so it does have a credit balance, which reflects as a positive
balance (i.e. additional sales) on the income statement.
What my question pertains to is what default accounts should be used in the
control accounts/reason codes. The way it works now is that when our
quality rep does an INS-DMR (scrapping the parts) - a debit to a "Cost of
Quality-DMR" account or INS-MTL (creating a rework job and moving the cost
to WIP) - a debit to "WIP-Material", the credit side of the transaction is
to "Returns & Allowances". These transactions, combined with the actual
credit memos she issues (a debit to "Returns & Allowances"/credit to A/R)
has resulted in a net credit balance to "Returns & Allowances". After
talking to our quality rep and having her explain her transactions, it
became clear to me that the debits to "Cost of Quality-DMR" should have
actually gone to the "Returns & Allowances" account. How do I correct this?
I guess I need someone to explain how quality/reject-related costs flow
through the system (I don't understand the purpose of the "INSPECTION",
"DMR", & "DMR-WRITE OFF" entries in the G/L control accounts setup - I've
got all three pointed to "Cost of Quality" overhead accounts). My
accounting knowledge would tell me to do the following:
1) receive parts back in and inspect (NO INITIAL ACCOUNTING ENTRIES)
2) if parts are O.K., ship back out, if not, place in quarantine area (1.
DR. QUARANTINE INVENTORY/CR. COGS or MATERIAL VARIANCE & 2. DR. RETURNS &
ALLOWANCES/CR. ACCTS. REC.)
3) either rework parts (DR. WIP/CR. QUARANTINE INVENTORY) and rebill once
completed w/ the rework-related costs being charged to a "Cost of Quality"
account or scrap parts (DR. COST OF GOODS SOLD or MATERIAL VARIANCE/CR.
QUARANTINE INVENTORY)
Please let me know where my logic is flawed and where I need to change my
setups so that the Vantage Quality Module works the "proper" way.
Thanks in advance for your assistance!
Thanks!
Rick Ludwig
-----Original Message-----
From: Edward F. Fox, Jr. [mailto:efox@...]
Sent: Wednesday, May 26, 2004 11:39 AM
To: vantage@yahoogroups.com
Subject: RE: [Vantage] QUALITY MODULE/RMA ACCOUNT SETUP
The returns and allowances is the sales amount from the credit memo. The
cost of the return should go to a contra-cos account. BTW what is a
positive balance? Do you mean a debit balance? The R&A account should have
a debit balance.
-----Original Message-----
From: Ludwig, Rick [mailto:RickL@...]
Sent: Wednesday, May 26, 2004 10:58 AM
To: Vantage@yahoogroups.com
Subject: [Vantage] QUALITY MODULE/RMA ACCOUNT SETUP
To all accounting gurus...
We began to use the Quality Module last month and I set up all the
control/default accounts how I thought they should be; however, when I
wrapped up my financials, I actually had a "positive" Returns & Allowances
account balance as a result of the INS-DMR (not reworkable) & INS-MTL (sent
to rework job) transactions!! (my true "Returns & Allowances" transactions
fell to an account "Cost of Quality-DMR" that I had established for the
additional costs to rework rejected parts)
Can any of you that are using the Quality Module walk me though how the
transactions are supposed to flow and suggest what control/default reason
accounts I should be using so that my financials are accurate in the future?
Sincerely,
Rick Ludwig
Vice President of Finance & Administration
Metal Spinners, Inc.
Angola, IN 46703
DIRECT (260) 665-2158 x25
FAX (260) 665-5327
Useful links for the Yahoo!Groups Vantage Board are: ( Note: You must have
already linked your email address to a yahoo id to enable access. )
(1) To access the Files Section of our Yahoo!Group for Report Builder and
Crystal Reports and other 'goodies', please goto:
http://groups.yahoo.com/group/vantage/files/.
(2) To search through old msg's goto:
http://groups.yahoo.com/group/vantage/messages
(3) To view links to Vendors that provide Vantage services goto:
http://groups.yahoo.com/group/vantage/links
Yahoo! Groups Links
Useful links for the Yahoo!Groups Vantage Board are: ( Note: You must have
already linked your email address to a yahoo id to enable access. )
(1) To access the Files Section of our Yahoo!Group for Report Builder and
Crystal Reports and other 'goodies', please goto:
http://groups.yahoo.com/group/vantage/files/.
(2) To search through old msg's goto:
http://groups.yahoo.com/group/vantage/messages
(3) To view links to Vendors that provide Vantage services goto:
http://groups.yahoo.com/group/vantage/links
Yahoo! Groups Sponsor
ADVERTISEMENT
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oups/S=1705007183:HM/EXP=1085675962/A=2128215/R=0/SIG=10se96mf6/*http://
companion.yahoo.com> click here
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[Non-text portions of this message have been removed]
Useful links for the Yahoo!Groups Vantage Board are: ( Note: You must have
already linked your email address to a yahoo id to enable access. )
(1) To access the Files Section of our Yahoo!Group for Report Builder and
Crystal Reports and other 'goodies', please goto:
http://groups.yahoo.com/group/vantage/files/.
(2) To search through old msg's goto:
http://groups.yahoo.com/group/vantage/messages
(3) To view links to Vendors that provide Vantage services goto:
http://groups.yahoo.com/group/vantage/links
Yahoo! Groups Links