Peachtree and rental equipment


D

Diane Koers

OK everyone...I need to pick your brains.... Anyone out there dealing with
rental equipment?

My client buys equipment then rents it out. They might buy a unit for
$200.00 so they enter a Purchase / Receive Inventory which puts the unit
into inventory and gives it a cost. Next they rent it to a hospital for
$75.00 through an Invoice which removes the item from inventory. This
totally goofs up the COGS though...because they are selling for less than
they originally paid.

A month or so later, they get the unit back from the hospital so they need
to put it back into stock. Sounds like an inventory adjustment to me...but
I'm confused what to do about the costing here.

This cycle can go on and on for the same original unit. can we keep the COGS
correct. Any ideas?

Thanks,
Diane
www.thepeachtreelady.com
 
P

PapaFrank

Hi Diane
Technically not an Inventory Item but a working asset !
I know they are using inventory to track amount on hand ( btw) are we
talking about IV pumps?
COGS should not be an issue in my humble opinion.
 
D

D Drake

Diane, I use the inventory control to track the item as non-stock. Use
re-occurring invoicing to bill the rentals. Depreciation entries ( re-occur
GL ) take care of the COGS which is really a misnomer. If he wants to track
the # of times an asset has been rented, set the item up as regular
inventory, use $0 as cost and input some finite number as the item
amounts... say I rent a unit every month and want to track the number of
times it's rented for the year...I would purchase or invadjust the item # as
12, then each month as item is invoiced system reduces QOH by 1. same would
go for weekly/daily/yearly rentals. Just play with the quanity of available
items.

Dave
 
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Rental Income

Basic rule in accounting, match your revenue and expenses. The rentals are fixed assets which depreciation when rented, so rental depreciation is a function of total rental revenue and sale proceeds. Take the sum of these as a percentage of cost times rental income each month, and that is your rental depreciaiton per month. Even gross margin as a percentage of rental income when rented, and on the sale.





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I wish I could understand the answers here, as I am trying to setup peachtree to do just this right now. What Dave said about recurring invoices doesn't work for me, as it is never the same person renting our equipment. Also, I am not sure I understand what PapaFrank said about setting it up as a working asset instead of an inventory item?

Could someone spend a few moments explaining specifically which fuction is the best to use for renting out many items that will come back regularly, so that Quantites on hand can be tracked, and also so that all items that are being rented at any one time can be reported on as well as to easily report on what items we currently have on hand?

Thanks in advance!
 

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