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Last modified on 6/30/2016 1:38 PM by User.

Tags:
Cost-Per-Copy, Program, Cost, Per, Copy

Cost-Per-Copy Program

The goal is to bill the client one item number each month for a monthly fee, but have the amount of the monthly fee go to several different revenue G/L account numbers.

 

In order to accomplish the goal of a cost-per-copy program, a number of steps need to be performed before-hand.   The first being to determine the number of items that will be needed, followed by setting up the Bill-of Material, and finally Contract Records if the customer is getting a special price.  In the sample below the steps are outlined using the assumption that a client, with special pricing, is billed monthly for the paper, equipment, toner and service used.

 

Please note:  If this is the first bill of material being setup on the system you should see + below for the parameter setting to activate the basic function of automatically populating orders with the bill of material component items. You may also need to contact your software provider to have the full set of bill of material features enabled.

 

Step 1.  In the Item Master (Task 1 or 8 in the I/C module) a ‘parent’ item must be set up.  An example:

01. Item #      :              CPC-KIP8160

02. Description :           COST/COPY EQUIP/SUPPLY/SERVICE

03. Item G/L #  :           128-00 Inv - Cost Per Copy

04. Sell by     :              SQUARE FT

05. Stock by    :            SQUARE FT

06. Master units:           1

07. Avg. cost   :            0.0

08. Last cost   :             0.0

09. Other cost :             0.0

10. Freight:                   0.0

11. Price 1 thru 9     :    0

20. Taxable     :            T         TAXABLE

21. Item Type   :           M         Material/Labor/Rental/Hold/Discontinued

22. Input format:           0

23. Product code:         7          COST/COPY

24. Report class:           70        COST PER COPY

25. Serialized? :            N

26. Dimensional?:         R          Repro-no quantity or the type maybe an “M” (see ** below for additional information on “M” dimensional type)

27. Allow B/O?:           Y

28. Net priced?:            N

29. Old item #?:            N

30. Quan table  :           N/A

31. Ship weight:           0.0

32. Print Labels:           O

33. Add source:            N

34. Price code/unused:                  

35. ABC code:                

36. Item weight:           0

 

 

The customer is billed for this item monthly.  This is often the only item number the customer sees on the invoice.  See ++ below for the parameter setting below to control printing of component items.

 

·        Please note the G/L account number placed on this item. 

 

 

Step 2.  The ‘components’  (toner, service, paper & equipment) also need to be setup in the Item Master as separate item numbers.   If the client goes over the base quantity allowed and is charged a premium or ‘overage’ price, then a second item would need to set up as well…for example:  one for the service and one for the service-overage.  Below is an example for the paper item:

 

01. Item #      :              CPC-PAPER

02. Description :           CPC ENGINEERING BOND

03. Item G/L #  :           123-00 Inv - Xerographic Products

04. Sell by     :              EA

05. Stock by    :            RM

06. Master units:           500

07. Avg. cost   :            0.05  

08. Last cost   :             0.05

11. Price 1 thru 9:         0.08

20. Taxable     :            T           TAXABLE

21. Item Type   :           M          Material/Labor/Rental/Hold/Discontinued

22. Input format            :0

23. Product code:         3           XEROGRAPHY

24. Report class:           27         BOND

26. Dimensional?:         N         Non-dimensional

27. Allow B/O?:           Y

28. Net priced?:            N

29. Old item #?:            N

30. Quan table  :           N/A

31. Ship weight:           0.0

32. Print Labels:           O

33. Add source:            N

34. Unused:                  

35. ABC code:                

36. Item weight:           0

 

 

Please note the G/L account for the item.  The G/L account number should be the account where you want the paper portion of the revenue to go.  Using our sample, 3 additional item #’s need to be created… one for the Service, one for the Toner and another for Equipment (or Parts).  A different G/L account number can be used on each item.

 

See ++ below for information on the parameter setting to control printing of component items.

 

 

 

 

 

Step 3.  Next a Bill-of-Material (BOM) record needs to be added to ‘link’ the Parent and Component items.  In the Inventory Control module, go to Task #28, then Sub-task #1 (Bill of Material Maintenance).  Add a ‘new’ record.  Below is an example the Paper component:

 

01. Parent item :           CPC-KIP8160            COST/COPY EQUIP/SUPPLY/SERVICE

02. Sequence #  :         010

03. Component #        CPC-PAPER                CPC ENGINEERING BOND

04. Quantity    :          1  REAM or sheets of paper or roll or square fee

05. BOM qty-type:     P

 

Using our sample, 3 additional BOM records for the ‘parent’ item CPC-KIP8160 need to be added…..one for the Service, one for the Toner and another for Equipment (or Parts)  The ‘Sequence #’ indicates in which order the part will ‘explode’ on the screen after the ‘parent’ item is entered on the sales order.  Therefore, if you want Paper to come first, number it sequence # 10, with Equipment # 20, etc. 

 

 

Step 4.   If the customer is getting ‘special pricing’, set up a Contract Record.  In the Order Processing module, go to Task #21 – Customer Contract Item File.   Add a new record.  Below is an example:

01. Customer #  :     31988               ACME CORPORATION

02. Alt ship-to#:      00000

03. Contract Key:   CPC-PAPER    CPC ENGINEERING BOND

04. Cust/item#

05. Type ($/%/T):   $

06. Price / Disc:      20.00 REAM, or the price for one sq. foot, sheet or roll of paper

07. Price level :

08. Exp date    :       Date the yearly contract ends

 

A customer contract record would need to be set up for the Paper, Equip/Parts, Toner and Service items.  For the sample, the CPC-KIP8160 item will have a zero price in the item master file.  Here is an example of the contract price for the component items:

CPC-PAPER               $20.00

CPC-TONER              $50.00

CPC-PARTS               $80.00

CPC-SERVICE           $50.00 

 

The dollar amounts from suppressed BOM component items will “roll up” and show as part of the pricing on the parent item.  Therefore, if CPC-KIP8160 (the ‘parent item’) has a zero price, the 4 component items will roll up into the price of the CPC-KIP8160 to give it a selling price of $200.00.  The revenue for each of the component items will go to the G/L account number assigned to the item.

 

Note: If the customer gets the items for free because, a customer contract record might need to be set up for the actual paper, toner, equipment & parts with a 100% discount.  Then when the customer needs paper, you still put it on an invoice for a zero price.  This way your inventory is correct and the cost of the paper will go to the cost of sales G/L account #.

 

 

 

NOTE:  if you are going to have ‘Overages”, because the customer used more than the original contract call for and will be charged a different price, another ‘parent’ item (i.e. CPC-KIP8160 OVERAGE) along with any items that may also be ‘overages’ (i.e. CPC-SERVICE OVERAGE); then setup a BOM using the overage-parent item and the overage-components, and also set up with new Customer Contract records if they will get pricing other than normal pricing.    However, for example, if there is no additional price charged for Paper, just for Equip/Parts, Toner & Service, there is no need for a Paper-overage item.  The original CPC-PAPER can be used when setting up the “Overage BOM”, and a new Customer Contract Record won’t be needed because the price will remain the same for the paper.

 

Overview:  Set up the parent & component items; linking the parent & component items in the BOM file; and finally, if there is special pricing, creating specific customer pricing in the Customer Contract File.    

 

 

** Will “Clicks’ be used to record the usage?  Where the system keeps track of the click counts?   If so, the parent item needs to be set up a little differently, please see the document titled:  Meter Billing for complete instructions on how to set up the item.  The Dimensional Type of “M” is used for ‘clicks.

 

+ To activate the basic function of pulling bill of material component items onto each order when billing the parent item you must have the following parameter setting:

  • Inventory Control (module 5)
    • System Management (task 32)
      • Modify parameter files (sub-task 22)
        • Bill of materials (selection 2)
          • AUTOBUILD'BOM=YES  (or =YESI)

 

++ If you do NOT want the CPC Bill-of-Material component item #’s printing on the customer’s invoice go to:

  • Order Processing (module 6)
    • System Management (task 32)
      • Modify parameter files (sub-task 22)
        • O/E General (1)
          • Look for: PRINT’BOM’COMPONENT=NNYYNN
          • Doc type          1 2 3 4 5 6    
          • Each position can be Y (print) or N (don’t print)
          • Position
            • 1=Sales & B/O (New orders)
            • 2=Sales & B/O (New orders)
            • 3=Shop (Work orders)
            • 4=Warehouse (picking tickets)
            • 5=Shipping (shippers)
            • 6=Accounting (invoices)

 

Any dollar amounts from suppressed BOM components will be “rolled up” and shown as part of the pricing on the parent item where applicable.