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DealerCenter Accounting Manual · access even if QuickBooks is not running” and press continue....
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DealerCenterAccountingManual
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TableofContents
SETTINGUPANDUSINGTHEQUICKBOOKSBRIDGEAPPLICATIONPAGE3-10CHARTOFACCOUNTDESCRIPTIONSPAGE11-14CASHACCOUNTINGPAGE15-16INVENTORYACCOUNTINGPAGE17-19SALESACCOUNTINGPAGE20-27BHPHACCOUNTINGPAGE28-30RFCACCOUNTINGPAGE31MONTHENDCLOSINGPAGE32TROUBLESHOOTING PAGE33
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SettingUpandUsingtheQuickBooksBridgeApplicationThe QuickBooks bridge application acts as a middleman between the cloud based DealerCenter and yourQuickBooksfileswhicharestoredonyourlocalcomputer.TheQuickBooksbridgeonlyallowsuserstoposttheactivitythroughthepreviousdaysoastoavoidpostingpartialactivityinthemiddleoftheday.OPENINGTHEAPPLICATIONInordertobeginthepostingprocess,opentheQuickBooksbridgeapplicationandloginwithyourDealerCentercredentials.Onceinsidetheapplicationyouwillseethefollowingdisplay
1. SAVE–Thisbuttonsavesyourconfigurationforthenexttimeyoulogin
2. DEALERERSHIP/RFC–Thisbuttonallowsyoutotogglebetweentheaccountingforthedealershipandtheaccountingforarelatedfinancecompany.DealerswhodonothaveaRFCneednoteverclickontheRFCbutton. Dealers who do have a RFC should pay special attention to whether the accounting bridge iscurrentlyconnectedtothedealershipQuickBooksorRFCQuickBookswhenpreparingtopost.
3. LINKNEWFILE–ThisbuttonallowsyoutoselecttheQuickBooksfileyouwishtopostto.Thissectionalso
verifiesthelinktotheQuickBooksfiletomakesurethattheQuickBooksfilelocationhasnotchangedsincelasttimeandisaccessible.
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4. CHARTOFACCOUNTS–Thisbuttonallowsyoutoviewthechartofaccounts.Inthissection,thedefault
DealerCenterchartofaccountsiscomparedtothechartofaccountsinthelinkedQuickBooksfiletoensurethat all accounts areproperlymapped and linked.Any accountswithout a green tickmust be relinkedbeforeproceedinganyfurther.
5. JOURNAL ENTRIES – This button allows you to preview the data before it is actually posted to theQuickBooks.Selectthedatesyouwishtopreviewandyouwillseeasummarizedjournalentryforthedays’activity.OnceyouaresatisfiedwiththeactivityyoumaypostitintotheQuickBooksfile.Oncepostedtheapplicationwill showagreen tickmarknext to thatday indicating theactivity is alreadyposted to theQuickBooks.
DEALERERSHIP/RFCFordealerswhooperatearelatedfinancecompany,theQuickBooksbridgeallowspostingtoseparateQuickBooksfiles, one for the dealership and one for the finance company. Please selectwhether youwish to post to thedealershiportheRFCbeforeproceedingtotheothersteps.
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LINKNEWFILEWhenever theapplicationstartsup, it verifies theconnection to theQuickBooks file. If theQuickBooks filehasmoved,youwillneedtorelinkthefile.QuickBooksneednotbeopeninordertoposttotheQuickBooksfile,butitmustbeinmulti-usermode.TheprocessforlinkinganewQuickBooksfileforthefirstisasfollows.
a. OpenQuickBooksandhavetheCompanyfileopenb. OpentheQuickBooksbridgeapplicationc. SelectDealershiporRFCd. Clickthebrowsebutton
e. BrowsetothelocationoftheQuickBooksfile,selectitandpressopen.
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f. QuickBookswillsuddenlypromptyoutoauthorizeNowcommQBCommunicator.Select“Yes,always;allowaccessevenifQuickBooksisnotrunning”andpresscontinue.
g. NowswitchtheQuickBooksfileintomulti-usermodeandthenyoumayclosetheQuickBooksfile.
h. NowyourQuickBooksissuccessfullylinkedtotheapplicationandtheQuickBooksbridgeapplicationwillbeabletoposttotheQuickBooksfilewhetheryouhavetheQuickBooksopenornot.
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CHARTOFACCOUNTS
Settingupthechartofaccountscorrectlyisacriticalstepinsuccessfullyusingtheapplication.Theprocessofsettingupthechartofaccountsshouldbecompletedbyanexperiencedaccountantespeciallyifyouarenotgoingtousethe recommended chart of accounts. Every single account must be linked before proceeding. To view all theaccountsthatmustbelinked,clickthe“All”buttonatthetop.IfyoufinditeasiertolookatjusttheinventoryorsalesorBHPHaccountsatatime,clickthosebuttonsatthetop.IfyoualreadyuseQuickBooksandhaveachartofaccountsinyourQuickBooksthatworksforyou,thenyouneedtoclickoneachlineandselecttheappropriatedebitandcreditaccount,usingtherecommendedaccountsasaguideforyourselections.IfyouarestartingwithnewQuickBooksfilesoryouarenothappywithyourexistingchartofaccounts,youcanpressthe“useNowcom”buttonwhichwillgeneratethedefaultchartofaccountsintoyourQuickBooksfile.Onceyouaredonesettingupyourchartofaccounts,presssaveandpleaseensurethatyouhavegreencheckmarksnexttoeachandeveryaccount,verifyingthatthechartofaccountsetupiscomplete.
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JOURNALENTRIESOncetheQuickBooksfileislinkedandthechartofaccountsestablished,wecanstarttopreviewandpostjournalentries.
Selectthedayyouwishtopostatthetopofthescreenandpressthemagnifyingglassicontogeneratethepreviewofthetransaction.Pleasenotetheapplicationwillnotletyoupreviewthecurrentdaysjournalentryasthecurrentdaymaystillchange.Youmayonlypreviewhistoricaldaysjournalentries.Thetransactionthatisdisplayedfirstbydays(Ifyouareviewingmultipledaysatonce)andthenissummarizedbydepartment(Inventory,Sales,BHPH).Ifyouwishtoseetheitemsthatmakeupaparticularnumber,simplyclickonthatnumber.
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Ifyouwishtoseeeverysingleindividualtransactionforaperiod,youmayexportthedetailouttoexcelbypressingtheexportbuttoninthetoprighthandcorner.
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Onceyouaresatisfiedthatthepreviewpostisaccurate,youmaypostitintoyourQuickBooksfilebypressingthepostbutton.Ifthepostingprocedureissuccessfulyouwillseeagreencheckmarknexttothatday’sentry.
Theapplicationkeepsalogofthelastdaythatyoupostedshownatthetopofthescreen“LastPostedDate:”IfyouneedtorepostadayintotheQuickBooksfile,youmaydosoHOWEVERyoushouldmanuallydeletethepreviouspostingfromtheQuickBooksbeforere-postingtoavoiddoubleentriesintheQuickBooks.
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ChartofAccountDescriptionsUNDEPOSITEDCASHCLEARING(ASSET,DR+CR-)This temporaryaccount represents themoniescollected fromcustomers in the formofdownpayments,BHPHPaymentsandsideloans.DailythedealershouldmakeadepositentryagainstthebankaccountintheQuickBookstozerothisaccountout.FINANCERECEIVABLES(ASSET,DR+CR-)ThisaccountrepresentstheprincipalbalanceofBuyHere,PayHereloansowedbycustomerstothedealer.InterestandfeesarenotrecordedasanassetandareonlyrecordedintotheQuickBookswhencollected(notwhenearned).DEFERREDDOWNRECEIVABLES(ASSET,DR+CR-)Thisaccountrepresentsuncollecteddeferreddownpaymentsowedbycustomerstothedealer.SIDELOANRECEIVABLES(ASSET,DR+CR-)Thisaccountrepresentsuncollectedsideloans(normallyforvehiclerepairs)owedbycustomerstothedealer.CPIRECEIVABLE(ASSET,DR+CR-)ThisaccountrepresentsfutureCollateralProtectionInsurance(CPI)paymentsowedbycustomerstothedealer.CPIreceivableisnotatruereceivablebutratherameansoftrackinginsurancepayments.ThisaccountisoffsetbyaCPIpayableaccount.LENDERRESERVE(ASSET,DR+CR-)Thisaccountrepresents“dealerreserve”or“backendprofit”onspecialfinancedeals.USEDCARINVENTORY(ASSET,DR+CR-)Thisaccountrepresentsunsold inventory.Additionallycostadds,packsandwritedownsfromDealerCenterarealsorecordedinthisaccount.DUEFROMTHIRDPARTYFINANCECOMPANIES(ASSET,DR+CR-)ThisaccountrepresentsmoneyowedbythirdpartyfinancecompaniestothedealerforsellingBHPHloanstothirdpartyfinancecompanies.DUEFROMAFFILIATEDCOMPANIES(ASSET,DR+CR-)Thisaccountrepresentsmoneyowedbyarelatedfinancecompany(RFC)tothedealerforsellingBHPHloanstotheRFC.WHOLESALE&DLRTSF(ASSET,DR+CR-)Thisaccountrepresentsmoneyowedtothedealerforwholesaledvehicles.CPIPAYABLE(LIABILITY,DR-CR+)ThisaccountrepresentsfutureinsurancepremiumsowedtotheCPIinsurancecompany.CPIpayableisnotatruepayablebutratherameansoftrackinginsurancepayments.ThisaccountisoffsetbyaCPIreceivableaccount.STATEFEESPAYABLE(LIABILITY,DR-CR+)Thisaccountrepresentsstatefeesowedtothestateonsolddeals.
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VEHICLECLEARING(LIABILITY,DR-CR+)This temporary account is used in the recording of inventory purchases.When paid for inventory is added toDealerCenter, this account is credited for the value of the inventory. The dealer should code payment for theinventorytothisaccountinQuickBookstozerothisaccountout.VEHICLELIENPAYABLE(LIABILITY,DR-CR+)Thisaccountrepresentslienpayoffsdueotherdealersontrade-ins.VEHICLEPROTECTIONS&ESCPAYABLE(LIABILITY,DR-CR+)Thisaccountrepresentsservicecontracts,GAPinsuranceandanyotheradd-onproductssoldtothecustomeratthetimeofsalewhichmustbepaidtothirdpartyproviders.SALARIES&COMMISIONSPAYABLE(LIABILITY,DR-CR+)ThisaccountrepresentscommissionsowedtoemployeesthatwereenteredintoDealerCenteronsolddeals.SALESTAXESPAYABLE(LIABILITY,DR-CR+)Thisaccountrepresentssalestaxowedtothestateonsolddeals.DRAFTSPAYABLE(LIABILITY,DR-CR+)Thisaccountrepresentsinventorypurchasedondraftorinventorypurchasedbutnotyetpaidfor.Whendealerslaterpaythedrafts,thecheckinQuickBooksshouldbecodedtothisaccount.NOTESPAYABLE–FLOORPLAN(LIABILITY,DR-CR+)Thisaccountrepresentsinventorycurrently“floored”bythedealer.Whendealerslaterpayoffthefloorplan,theprincipalportionof the check inQuickBooks shouldbe coded to this account.Any feesor interestpaidon thefloorplanshouldbecodedtoaseparateaccount“floorplaninterest”.AFTERMARKETMERCHANDISESALES(INCOME,DR-CR+)Thisaccountrepresentsaccessories,surfaceprotectionandtheftdeterrentssoldtocustomers.CLEARING(INCOME,DR-CR+)Thistemporaryaccountisusedtherecordingofsaletransactionsandshouldnothaveabalance.DOCUMENTATIONFEEINCOME(INCOME,DR-CR+)Thisaccountrepresentsdocumentationfeeschargedtocustomersonsolddeals.LATEFEE&OTHERINCOME(INCOME,DR-CR+)Thisaccountrepresents latefeesandotherfeescollectedonBHPHaccounts.LatefeesandBHPHfeesareonlyrecordedwhencollected(notwhenearned)OTHERINCOME(INCOME,DR-CR+)Thisaccountrepresentsdealcancellationfeeschargedtocustomersonsolddeals.RECOVERYINCOME(INCOME,DR-CR+)ThisaccountrepresentscollectionsonpreviouslychargedoffBHPHaccounts.Onceanaccountischargedoff,allcollectionsaretreatedasrecoveryincome(thereisnolongerprincipal/interest/fees).
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SERVICE&REPAIRSALES(INCOME,DR-CR+)Thisaccountrepresentsserviceandrepairworkchargedtothecustomer.Ifasidenoteisrecordedfortherepairwork,thesidenoteissetupagainstthisaccount.USEDCARBHPHSALES(INCOME,DR-CR+)ThisaccountrepresentsthesalespriceofBuyHere,PayHeredeals.USEDCARCASHSALES(INCOME,DR-CR+)Thisaccountrepresentsthesalespriceofcashdeals.USEDCARRETAILSALES(INCOME,DR-CR+)Thisaccountrepresentsthesalespriceofspecialfinance/retaildeals.USEDCARWHOLESALESALES(INCOME,DR-CR+)Thisaccountrepresentsthesalespriceofwholesaledeals.USEDVEHICLEF&IPRODUCTINCOME(INCOME,DR-CR+)ThisaccountrepresentsF&Iproductssoldtocustomers.USEDVEHICLEFINANCEINCOME(INCOME,DR-CR+)This account represents interest collected fromBHPHcustomers. Interest isonly recordedwhencollected (notwhenearned).COSTOFAFTEMARKETMERCHSALES(COSTOFGOODSOLD,DR+CR-)Thisaccountrepresentsthedealer’scostofaccessories,surfaceprotectionandtheftdeterrentssoldtocustomers.COSTOFUSEDCARBHPHSALES(COSTOFGOODSOLD,DR+CR-)Thisaccountrepresentsthetotalvehiclecost,includingcostadds,packsandwrite-downsonBHPHdeals.COSTOFUSEDCARCASHSALES(COSTOFGOODSOLD,DR+CR-)Thisaccountrepresentsthetotalvehiclecost,includingcostadds,packsandwrite-downsoncashdeals.COSTOFUSEDCARRETAILSALES(COSTOFGOODSOLD,DR+CR-)Thisaccountrepresentsthetotalvehiclecost,includingcostadds,packsandwrite-downsonspecialfinance/retaildeals.COSTOFUSEDCARWHSLESALES(COSTOFGOODSOLD,DR+CR-)Thisaccountrepresentsthetotalvehiclecost,includingcostadds,packsandwrite-downsonwholesaledeals.F&IPRODUCTCOSTS(COSTOFGOODSOLD,DR+CR-)Thisaccountrepresentsthedealer’scostofF&Iproductssoldtocustomers.LENDERDISCOUNTS&OTHALLOWANCE(COSTOFGOODSOLD,DR+CR-)Thisaccountrepresentsthelenderfeestakenoutofthenetcheckonspecialfinance/retaildeals.OVERALLOWANCEONTRADE(COSTOFGOODSOLD,DR+CR-)Thisaccountrepresentsanyoverallowancegiventoacustomeronatrade-in.Anoverallowanceisthedifferencebetweenthetradeallowanceandthevalueusedtobookinthetrade.
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REPOSSESSIONLOSSES(COSTOFGOODSOLD,DR+CR-)ThisaccountrepresentstheprincipalamountlostwhenBHPHaccountsarechargedoff.Theprincipalamountlostistheprincipalpayoffoftheaccountlessthevalueoftherepossessedvehicle(Ifthedealerchoosestorestockthevehicle). Interest and fees are not included in this amount as theywere not originally booked as a receivable.Additionallylossesfromsidenotecancellationsandanyshortagesonpayoffarealsobookedtothisaccount.USEDCARINVENTORYADJUSTMENTS(COSTOFGOODSOLD,DR+CR-)Thisaccountrepresentswrite-downsbookedtoinventory.USEDCARRECONDITIONING(COSTOFGOODSOLD,DR+CR-)Thisaccount representsexpenses incurred reconditioning inventory.Whendealerspay reconditioningbills, theexpenses should be coded to this account. If the dealer also enters those reconditioning bills as a cost add inDealerCenterthen,theexpensewillbereclassedfromthisaccounttousedcarinventory.FLOORPLANINTEREST(EXPENSE,DR+CR-)Thisaccountrepresentsfeesandinterestpaidonfloorplans.Whendealersmakeinterestandfeepaymentsonthefloorplan,thefeesandinterestshouldbecodedtothisaccount.IfdealerschoosetoaddedthefloorfeestothevehiclecostinDealerCenterthenthefeesandinterestwillbereclassedfromthisaccounttousedcarinventory.LOSSONSALEOFRECEIVABLES–THIRDPARTY(EXPENSE,DR+CR-)This account represents the discount lost when selling BHPH accounts to third party finance companies. Thediscountisthedifferencebetweenthecustomer’sprincipalbalanceandtheamountreceivedfromthethirdpartyfinance company. Interest and fees are not included in this amount as they were not originally booked as areceivable.LOSSONSALEOFRECEIVABLES–RFC(EXPENSE,DR+CR-)This account represents the discount lostwhen selling BHPH account to a related finance company (RFC) Thediscountisthedifferencebetweenthecustomer’sprincipalbalanceandtheamountreceivedfromtheRFC.Interestandfeesarenotincludedinthisamountastheywerenotoriginallybookedasareceivable.ACCOUNTSSPECIFICTOTHERELATEDFINANCECOMPANYUNEARNEDDISCOUNT(LIABILITY,DR-CR+)This account represents the loss on sale of receivables deducted by the dealership. The dealership claimed adeductionandsothefinancecompanymustclaimacorrespondingincome,whichthefinancecompanydoesbyamortizingtheunearneddiscountintodiscountincomeoverthelifeofthefinancereceivables.DISCOUNTINCOME(INCOME,DR-CR+)Thisaccountrepresentsthediscountincomewhichhasbeenearnedbasedonthecollectionactivityofthefinancereceivables.Wheneverprincipaliscollectedorprincipalischargedoff,aprorateamountofdiscountisearnedfromunearneddiscountintodiscountincome.
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CashAccountingAccountingforcashisdependentondealersreconcilingthedailycollectionsandaccountingforanydifferencesinthecashdrawer.Dealersoftenhandlelargeamountsofcash,particularlyBuyHere,PayHeredealersanditiscriticalthataseniormemberofmanagementreconciletheamountdepositedtothebankwiththeamountDealerCentershowswascollected.Differenceswillneedtobeinvestigatedbymanagementandaccountedfor.Belowisasampleofadailycashreconciliationcontroladealershouldutilize
Inthisexample,DealerCenterreportsshowedthatwecollected$2,660indownpaymentsandBHPHpaymentsforthissampleday.Howeverweonlydeposited$2,450toourbankaccount.Inthisexampletherearemultiplereasonsforthisdifference.
1. There was a shortage of $10 of cash in the downpayments. This shortage should be investigated andmonitoredbymanagementtoensurethatnofraudhasoccurred.Ifmanagementbelievethemistakewasunitentional and immaterial, the $10will need to be recorded in theQuickbooks to a cash over/shortexpenseaccount.
2. $200was spentpayinga cashbill (For example$200paid to get a vehicleoutof impound).Wehighlydiscouragedealerspayinganybillsincashbecausethisopensthedealeruptopotentialfraud.Ifdealersmustpaybillsincash,werecommendthedealermaintainaseparatepettycashboxandthatpettycashexpensesbeapprovedbymanagementandreceiptskepttosupportthepettycashexpenses.However,intheexampleabovethedealerdidnotuseaseparatepettycashdrawerandspent$200ofthecashcollectedtogetavehicleoutofimpound.ThiscashexpensewillneedtoberecordedintheQuickBookstoastorageexpenseaccount.
3. A$100downpaymentwasenteredintoDealerCenterasacheckbutinfactwasacreditcardpayment.Sincethismoneywas ultimately deposited to our bank account, no accounting entry is necessary. Howevermanagementmuststillbecautiousascertaintypesoffraudcanbecommittedbyexchangingchecksforcash.
TheDealerCenterintegrationdebitedUndepositedCashClearingfor$2,660.Itisimportantthatthedealeraccountforall$2,660eventhoughonly$2,450wasactuallydepositedtotheBankaccount.ThedealershouldcredittheUndepositedCashClearingfor$2,660toemptytheclearingaccount.
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BelowisasampleofthecorrectdepositentrytobemadeintheQuickBookstocleartheclearingaccountinthisexample
The undeposited cash clearing account should be reconcilled daily and differences between DealerCentercollectionsandactualdepositsmustbereviewedandapprovedbymanagement.
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InventoryAccountingTheaccountingforinventoryvariesslightbasedonhowthedealershippaidforthevehicle.Avehiclecaneitherbepaid for, draft, floored, repossessed or Trade-in. (If the dealer does not select a paid for status, the vehicle isassumedtobepaidfor)BelowisasampleofavehiclebookedintoinventoryintoDealerCenter.
Here is a comparisonof the journal entriesmadeby the accounting integration into theQuickBooks basedonwhetherthevehicleispaid,draftorfloored.
Whenthedealerwritesthecheckforthevehicle intheQuickBooks,hewillhavetocodethechecktodifferentaccountsdependingonpaid,draftorfloor.
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Whenadealerpaysforinventory,heshouldcodethechecktoVehicleClearing.
Whenadealerpaysadraft,heshouldcodethechecktoDraftsPayable.
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Whenadealerpaysoffafloorplan,heshouldcodethechecktoNotesPayable–Floorplan.
Pleasenotethatfloorplansoftenchargefeesandinterestandthepayofftothefloorplancompanyshouldbesplitbetweenprincipalpayoffandthefees/interest.Additionally,thisexamplehad$349ofcostadds.Letsassumethe$349wasforanewwindscreen.Byputtingthecostaddonthevehicle,theaccountingintegrationisgoingcapitalizethecostofthewindscreenandincreasetheinventoryaccountby$349.Whenthedealerpaysforthewindscreen,heshouldcodethechecktousedcarreconditioning
Whenthe$349isputasacostaddinDealerCenter,theaccountingintegrationcapitalizesthisexpensebydebitingusedcarinventoryandcreditingusedcarreconditioning,asshownintheoriginalexample.
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SalesAccountingThejournalentriesforsalesaccountingcanbeoverwhelmingbecauseofthelargenumberofaccountsaffected.Fortunatelymostaccountsareself-explanatoryandrepresent thevarious taxes, fees,accessories,F&Iproductsassociatedwiththesale.Whatdoesvarybetweensalesishowthedealershipwillgetpaidforthesale.
Thisexampleshowsahighlysimplifiedsalesentry.Whatisimportanttonoteiswhattheaccountingassumesthedealerwilldowhendepositingthepaymentforthesale.
a. CashSales–Theaccountingentryassumesthedealer receivedpayment for thecashsalesandput themoneyintotheundepositedcashclearingaccount.Thedealerwillneedtoemptytheundepositedcashclearingaccountbyfollowingthecashreconcillationprocedurespreviouslydiscussed.
b. WholesaleSales–TheaccountingentryputtheamountowedthedealerintotheWholer&DealerTransferassetaccountandwhenthedealerreceivespaymentforthewholesales,hecancodethebankdeposittothisaccounttoclosethisaccount.
c. RetailSales–Theaccountingentryinitiallyputtheamountfinancedintothecontractsintransitaccount
andwhenthedealerreceivespaymentfortheretaildeal,hecancodethebankdeposittothisaccounttoclose theaccount.Howeveroftenretaildealshave lender feesandthenetcheck isoften less thenthecustomer’samount financed. Indealer centerwhen thedeal status is changed to“Sold –Funded”, thesystemwillprompttoenterthefinalnetcheckreceived.Foraccountingpurposes,thedifferencebetweentheamountfinancedandthenetcheckisconsideredlenderfeesandanadditionaljournalentryismadebythesystemtotheQuickBookstoreducethecontractsintransitdowntothenetcheckamountsothatthedealercandepositthenetcheckandsatisfythecontractintransitaccount.
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d. BHPH Sales – The accounting entry will take the customer’s amount financed and establish a financereceivable asset on the balance sheet. This finance receivable represents the principal owed by thecustomeranddoesnotcontaininterestorfees.AsthecustomermakespaymentsontheBHPHaccount,theprincipalportionofthecustomer’spaymentwillbecreditedagainstthisaccountwhileanyinterestandfeesarerecordedasincomewhencollected.
CASHSALES
Herewehaveacashsalefor$19,995withtotalcashtobereceivedof$20,124
Hereisthecorrespondingaccountingentrycomingfromthebridge
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*Pleasenotethattheclearingaccountisdebitedandcreditedby$20,124.Thissalesclearingaccountshouldalwaysbe$0whentheentriesarecorrectlylinked.AsyoucanseeUndepositedCashClearinghasbeendebitedby$20,124.Assumingthisistheonlytransactionfortheday,whenthedealercountshiscashattheendoftheeveningandentersthedepositentryintotheQuickBooksforhisBankofAmerica–Operatingaccount,thedepositwouldlookassuch
ThisentrywillemptytheUndepositedCashClearingaccountandputthedepositintotheoperatingaccountwhichshouldmatchthemoneytakentothebankfortheday.
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WHOLESALESALESHerewearewholesalingarepowehaveinstockfor$2,600.Thecostofthevehicleiscurrently$3,000,sowearegoingtohavea$400wholesaleloss.
Hereisthecorrespondingaccountingentrycomingfromthebridge
TheWhsle&DealerTxfrVehiclesaccountactsasawholesalereceivablesaccountandareceivableof$2,600hasbeensetuppendingthedealerreceivingthecheckforthevehicle.Whenthedealerdoesreceivethecheckforthevehicle,heentersitasfollows
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Thisentrywillempty theWhsle&DealerTxfrVehiclesaccountandput thedeposit into theoperatingaccountwhichshouldmatchthemoneytakentothebankfortheday.
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RetailSalesHerewehavearetaildealwearedoingwithanoutsidelender.Sellingthevehiclefor$25,000andgetting$5,000down.Thelenderischargingusa$1,500acquisitionfeeandweexpectournetchecktobe$20,225.50
Hereisthedealerbridgeaccountingentry.
*Pleasenotethatthe$5,000depositshouldbeenteredintoQuickBooksasabankdepositagainstthe“undepositedcashclearing”account.
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Itisimportanttonotethatwehavecreateda“ContractsinTransit”accountfor$21,725.50,whichistheamountfinanced rather than theexpectednet checkof $20,225.50. This is becausewedon’t know the final net checkamountuntilwegetitfromthelender.Whenwereceivethefinalnetcheckfromthelender,weenterthatintodealercenter“FinalNetCheck”andchangethestatusto“Sold–Funded”,which inturncreatesoneadditionaldealerbridgeentrytolowerthecontractsintransitfrom21,725.50to$20,350.00inthiscase.
ThedealermaynowenterthedepositintoQuickBooksassuch
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BHPHSalesHerewehaveaBHPHsale,wherewearesellingavehiclefor$19,995,getting$2,000downandfinancinginhousethebalanceof$19,373.69.
Hereisthedealerbridgeentryforthissale.
*Pleasenotethatthe$2,000depositshouldbeenteredintoQuickBooksasabankdepositagainstthe“undepositedcashclearing”account.Wehavecreatedafinancereceivableof$19,373.69whichrepresentstheprincipalbalanceowedtousebytheBHPHcustomer.
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BHPHAccountingSalesaccountingestablishesafinancereceivableatthetimeoftheBHPHSale.Fromtheretheaccountwilleithercollectoutorchargeoff.COLLECTIONSTotakeapayment,searchfortheBHPHaccountusingthesearchbarandoncetheBHPHaccountisopen,select“Takeapayment’
*Pleasenotethatinterestincomeandlatefeesareonlyrecordedwhencollected,notwhenearned.Herewehavetakenapaymentof$589.55,with$409.08goingtoprincipalad$180.47goingtointerest.Thedealerbridgeentrylooksassuch
Wehavereducedfinancereceivablesbytheprincipalof$409.08,wehaverecordedinterestintofinanceincomeof$180.47andput$589.55intotheundepositedcashclearingaccount.
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ThedealerthenneedstodepositthecashintoQuickBooksasshownbelow:
CHARGEOFFSIf theBHPHaccount,needs tobechargedoff, youcaneither recover thecollateraland restock it,or treat theaccountasaskip.Assumingwechargeoffanaccountwithaprincipalbalanceof$19,373.69andrecoverthecollateralworth$14,000.Ournetchargeoffwillbe$5,373.69.
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Thedealerbridgeentrylookasfollows
Repossessionlosseshasbeendebitedwiththecustomersprincipalbalanceof$19,373.69andthencreditedwiththerecoveryof$14,000.00,leavinganetlossof$5,373.69.Therecoveredcollateralhasalsobeenrestockedintoinventory.Atthetimeofchargeoff,anyuncollectedsidenotesordeferreddownpaymentsarealsochargedoffandincludedintherepossessionloss.Interestandlatefeesarenotpartofthechargeofflosssincetheywereneveraccruedinthefirstplace.
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RFCAccounting
RFCaccountingisalmostidenticaltodealershipaccountexceptfortheadditionofdiscountincome.Whenthedealershipsellsaloantothefinancecompanyatadiscount,theloanistransferredtotheRFCusingtheSell/TransferAcctscreenindealercenter.
Inthisexample,thedealershipsolda$28,183.00principalloanat20%discount,receiving$22,546.40andclaiminga$5,636.60lossonsaleofreceivables.Thedealerbridgeentryonthedealershipisasfollows
SincetheloanwassoldfromthedealershiptotheRFC,theRFChasacorrespondingentryontheirbooks.
Thisentrysetsupthereceivablesof$28,183.00($25,183.00+$3,000),recordsapayabletotheaffiliateddealershipof$22,546.40andrecordsaunearneddiscount(deferredrevenue)of$5,636.60.WhentakingapaymentonaRFCaccount,therewillbeanadditionalentrytorecognizeaprorataportionoftheunearneddiscountintodiscountincome.Similaryiftheaccountischargedoff,allremainingunearneddiscountwillbeearnedintodiscountincome.
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MonthEndClosingProcess
Accountingintegrationisatoolinthepreparationofmonthlyfinancialstatementsbutsimplyhavingaccountingintegrationturnedondoesnotensureaccurateandreliablefinancialstatements.Thereareanumberofprocessesdealersareresponsiblefortoensurethemonthendfinancialstatementsareaccurate.Themonthendfinancialstatementclosingshouldbehandledbyanexperiencedbookkeeper/accountant.Everydealer’sclosingprocesswilldifferbutherearesomegeneralstepstoclosethemonthlybooks.POSTALLACCOUNTINGINTEGRATIONENTRIESAllaccountingintegrationentriesforthemonthmustbepostedtotheQuickBooksbeforeyoucanbeginthemonthendclosingprocess.RUNTHEMONTHENDREPORTSReviewingthefinancialstatementstodetermineiftheyareaccurateinvolvescomparingthemonthendbalancesin QuickBooks to certain reports from DealerCenter. As such Dealers should print/save certain reports fromDealerCenter.Certainreportsaretimesensibleandareonlyaccuratewhenrunonthemonthendandthereforethedealershouldprint/savethemonthendreportsafterthecloseofbusinessonthelastdayofthemonth.ReportswhicharetimesensitiveincludetheBHPHdetailedaccountsreceivablelist,theinventorylist,thevehicledraftslistandthevehicleflooredlist.Otherreportsarenottimesensibleandcanbererunatalatertimesuchasasalesreport,collectionreport,chargeoffreport,Payoffreport.RECONCILETHEBANKSTATEMENTSInordertoensuretheallchecksanddepositshavebeenenteredintotheQuickBooks,dealersmustreconciletheirbank accounts using the QuickBooks banking reconcile function.When reconciling the bank accounts, dealersshouldnotforcebalancethereconciliation.IftherearedifferencesbetweenthebankstatementandQuickBooks,the differencesmust be researched and corrected. The importance of accurate bank reconciliations cannot beoverstated.COMPARINGACCOUNTBALANCESTheQuickBooksbalancesheetshouldbecomparedlinebylineagainstreportsfromDealerCenteraswellasotherdocumentationtodetermineifthebalanceshowninQuickBooksisaccurate.Differencesshouldberesearched.Themostcommondifferencesaremiscodedchecksanddepositsandsothedetailsofeachaccountmustberesearchedandcomparedtosupportingdocumentation.Onceallbalancesonthebalancesheetareaccurate,theprofitandlossstatementcanthenbecomparedlinebylineagainstDealercenterreportsforsales,chargeoffs,collectionsandpayoffstodetermineifthebalanceshowninQuickBooksisaccurate.Againanydifferencesmustberesearchedandcorrected.Asareminder,ifyoufindsomethingrecordedincorrectlyinQuickBooksanditwasgeneratedbytheaccountingintegration,itislikelytheitemisincorrectlyrecordedinDealerCenteraswellandyoumayhavetocorrectitinbothDealerCenterandQuickBooks.FINANCIALSSTATEMENTSOncethedealerbelievestheQuickBookshascorrectbalancesonthebalancesheetreportandprofitandlossreport,thedealershouldprinttheQuickBooksbalancesheetandprofitandlossandstoretheseinamonthendfolderalongwiththeDealerCenterreports,bankstatements,bankreconciliationsandanydocumentsusedduringthemonthendprocess.Accountingintegrationisatoolintheaccountingprocessanddoesnotreplaceexperiencedaccountingstaff.
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TroubleShootingtheDealerBridge
ByfarthemostcommonproblemwehaveseenwhendealersusethedealerbridgeisincorrectuseofDealerCenter.Onceyouareusingthedealerbridge,yourinputanduseofDealerCenteriscriticalforaccountingsuccess.Wehaveseendealersputlenderfeesinafieldcalled“DealCost”whichisafieldusetotrackanypostsalesexpenses,notlenderfees.Byputtinglenderfeesinthe“DealCost”field,accountinggenerateddifferententriesthanwhatshouldhavebeengeneratedinordertorecordlenderfees.Similarlywehaveseendealerswhodon’tdoBHPHdealsyetusetheBHPHsectiontotrackrepairnotesordeferreddownpaymentsandthenaresurprisedwhenthedealerbridgestartstogenerateBHPHjournalentries.Youcannotpartiallyusethedealerbridgeaccountingorpartiallyusedealercenter,onemustcommittofullytoboth.