When the work to be completed on a piece of equipment falls under warranty, the following steps should be completed to properly record and track the warranty work.
Create a Work Order
Choose Service Shop >> Processing >> Work Orders
A. Complete the header fields as applicable.
The Customer Number is that of the customer not the warranty vendor.
Type in the equipment stock number or serial number.
B. Press ENTER to access the body of the invoice.
Complete the Authorization Screen
Complete the Segment Screen
Place a "W" in the Charge to field.
The Warranty Supplier's A/R Account no. field will appear. Type in the appropriate account number or press F3 to list all AR accounts flagged with the "W" pricing method.
C. Press ENTER to access the Transaction Type screen.
Add Parts, Labor, Comments, etc.
Press ESC if you wish to add an additional Segment to the work order. Maybe the customer is responsible for certain sections of the work that will be completed.
If you do warranty work on a rental unit and you enter the work completed field, when the invoice is posted the rental status will change automatically to available.
Press F9 to leave the invoice open.
Press F10 to print or print/close the invoice.
When the invoice is complete you have two options:
A. Print and close the invoice.
The total of the warranty segment(s) will post to the GL account 11600 Warranty AR and the Warranty Suppliers A/R account.
Submit warranty to the vendor.
When payment is received from the Warranty Supplier you will complete the Cash Receipt's option just like you would for a customer payment.
Debit Cash Account for the amount the Vendor Paid
Credit the Warranty Supplier's A/R account for the entire amount of the invoice.
Debit an Expense or Labor Sales account for the difference. This will track whether you are making money or loosing money on warranties.
B. Print preliminary invoice
Leave the invoice open until notification of payment as been received by the warranty supplier.
Make adjustments to the invoice to match the amount paid.
Print and Close the Invoice.
Record the payment through Cash Receipts or Over-the-Counter just like you would record a customers. Make sure you post the payment to the Warranty or 11600 account for the Warranty's Suppliers A/R account.
Setup prior to making a work order with a Warranty Segment
A. Create a Warranty A/R account for each Warranty Supplier.
Choose Accounts Receivable >> Update >> Master Customer Information
Suggest using WARR?? as the account number. Replace the ?? with the Warranty Suppliers abbreviation. Example: WARRKU for Kubota
Set the following flags on the A/R account:
Page Down to the second page.
Place an "X" in Finance Charge, Statement Code, Taxable Code
Change the Parts Pricing to "W"
B. Adjust the each Manufacturer/Supplier Setup for the "W" pricing method to calculate the correct markup % for parts placed on a warranty invoice.
Choose Parts Inventory >> File Update >> Manufacturer/Suppliers
Page down to the second screen of each Manufacturer record.
Change the Warranty Method and Markup % fields. Either mark-up over Cost or mark below List.
The invoice will be created in accounts receivable. When you are paid, you can either put the money in the bank, or create an invoice in accounts payable with the offset being 11600 with the proper customer/vendor. Please remember this last step is critical.