Trade-Ins

A customer might trade-in merchandise towards buying other merchandise. This can be handled by creating two separate documents: an invoice and a credit memo. Or simply indicate that the item is a trade-in, while entering it as a line item on an invoice, at the same time as entering the new item being purchased.

This is done by typing an asterisk before the item number. If the item number is 100-101 and it is a trade-in, then enter the item as: *100101

The asterisk prefix tells the program that this item is a trade-in, and it will be handled accordingly in all calculations.
The word "<Trade-in>" will appear on the screen immediately under the line, after the item number field is completed. NOTE: The asterisk in front of the item number disappears at the same time. If you backtrack with the Left Arrow key to the item number field, the asterisk will reappear.
The cursor will stop at quantity. Enter the quantity that the customer is trading in. The computer will automatically indicate that quantity as completely shipped, and none backordered.
If the item has been set up in the Item master file, then the customer’s normal price for this item will be put in automatically.
- If the full price isn't going to be allowed on the trade-in, then use the Left Arrow to go back to the price field and change it, or if the cursor is at the bottom of the page at the "Modify last item? (Y/N)" prompt, enter a Y and go to the price field, and change it.
- When the price is correct and the system prompt states, "Do you want to calculate the group discounts (Y/N)", the answer must be N for No if group discounts are used; otherwise the price will be reset to the use the group discount price.

The extended total of the trade-in is subtracted from the invoice.

A parameter can be set to determine if the Sales Tax is calculated before or after the trade-in is subtracted from the invoice. See O/E module (6), System Management Functions (Task 32), Modify Parameter File (Sub-task 22), O/E - General (Selection 1), parameter: TRADE'TAX'FLAG.

If set to =Y then tax will be figured on the total sale, then trade-ins will be subtracted.
If set =N then trade-ins will be subtracted from the total first, then tax will be figured.

Trade-ins go back into stock. If what is being taken in as a trade-in is not new, you might not want it to go back into stock indistinguishable from new items. Some of our customers use a separate item number prefix for all trade-ins. They will still use the same description. This way, if they are looking up an item by description, they will find it, and they will know it is a trade-in based on the item prefix.

As soon as the order is Invoiced, the trade-in item goes back into stock.
In the Warehouse Master file (Task 19 in the Inventory module) these fields are updated: Quantity On-hand, MTD Qty prch, MTD Purch $.
In the Item Master file (Task 17 in the Inventory module) the following field is updated: Average cost.

The credit given to a customer for a trade-in goes in as the cost of the item, the same as if the trade-in was being bought from the customer.
For example: an item is normally sold for $75.00 and the last and average costs are $40.00. There is only 1 in stock. The same item is taken in on a trade-in. The customer is given credit for $65.00.
The new average cost is $52.50. The last cost is still $40.00. (One at $40 plus one at $65 = $105 divided by 2 is $52.50 average cost)

Normally when posting is done through the Invoiced Order Holding file (Task 2), every new item from every invoice and credit memo will post to the Item history (Task 18). However, the items that are traded in don't get posted to Item History.

Instead, when posting is done through the Invoiced Order Holding file (Task 2) to A/R, the system will create an invoice and a credit memo in Sales Entry & Editing (Task 1) in A/R.
For example: a new item is sold for $100.00 and an item is traded-in for $25.00. The net of the invoice is $75.00. Assume that the invoice # is 10321.
Sales Entry & Editing (in AR) will have invoice #10321 for $100.00 distributed to a sale G/L account #.
Sales Entry & Editing will also have credit memo #XXXXX for $25.00 distributed to an inventory G/L account #.
Credit memo #XXXXX will automatically be applied to invoice #10321.
To find an invoice # and credit memo # of an old trade-in go into A/R Task 19 Sales history, Sub-task 4 Print selected history records. Print a report for the customer in question & the date range needed. This report should have the original invoice # and the credit memo for the same date. The invoice can then be re-printed if needed through the O/P module.
- To see the G/L account #’s the invoice and the credit memo went to, go to A/R Task 21 Distribution history, Sub-task 4 Print selected distrib records. Print a report for the invoice # and for the credit memo #.

When posting is done through the Invoiced Order Holding File (Task 2) to A/R, the system will also post this item to the Purchase Order Module (7), Purchased Item History (Task 18).

The P/O # will be 999999.
The vendor # will be 99999
The vendor invoice # will be the order entry invoice #.
The receiver # will be the order # of the order entry invoice.
The Item cost $ will be the amount of the trade-in on the invoice.
A report may be printed from the Purchased Item History (Task 18), Print Selected History Records (Sub-task 4), for all items for PO #999999 for a certain date range to see all of the Trade-ins.
Any reports from Purchased Item History (Task 10), which include vendor #99999 will have the trade-ins included on the report.

TRADING IN A NON-STOCK ITEM:

Still type an asterisk before the item number. Item number can be up to 18 characters. The system will insert a dash – after the first 3 characters. If the item number, that is typed in after the asterisk, does not exist in the Inventory Control Module (5), Item Master (Task 17), then the cursor will drop down to the bottom of the screen. See the document Non-Stock Items for additional information on non-stock items. The system prompts for 11 fields as discussed below:

Description; Product code; Report class; G/L account#; Labels flag; Vendor #; Cash Value$; Credit $; Model year; Serialized; and Dimensional

Description: 30 characters, in all capital letters. Follow the pattern of normal descriptions

Product code: The default product code will be in place. Press Tab key to see the list of 9 Product Codes.

Report Class: The default report class will be in place. Press Tab key to see the list of up to 99 report classes.

G/L account #: The default G/L account # will be in place. This is usually an inventory G/L account number or type in the desired G/L account number. Only the first 5 digits of the G/L account number are required.

Labels flag: Read the prompt at the bottom of the screen: N=None, O=one label for shelf, E=one label per item.

Vendor #: The system will skip this prompt (The vendor # is 99999 for all trade-ins).

Cash value$: This will be the cost of the item.

Credit $ is the amount given to the customer for the item.

Model year is used only if the item is serialized. It goes to the Serialized Item Master file.

Serialized: No or Yes, is this item a Serialized item? If Y is answered, the system will prompt for a serial number.

Dimensional? Determines quantity prompts in O/E, i.e. Width & Height. Press Tab key to see the list of dimensional types. If a dimensional type is selected, the system will prompt with the appropriate extra questions on the line item, i.e. originals, sets, width, height, etc…