Trade-ins

This support notes are suitable for:

• ABSS Accounting
• ABSS Premier

Introduction

There are many businesses that deal in trade-ins, such as motor car traders. These trade-in type transactions can be quickly and easily accounted for in your ABSS software. This support note explains how.

How do I setup ABSS to record a trade-in?

Before recording any trade-in transactions, you will first need to setup a new asset banking account and a new Item.

Setting up a banking account

This account will be used as a clearing account to ‘hold’ the value of the trade-in.

1. Go to the Accounts command centre and click Account List.
2. Select the Asset tab and click New.
3. Make sure you select Bank in the Account Type drop-down menu.
4. Give the account a unique number that suits your account list.
5. Name the account Trade-in Clearing Account.
6. Click OK.

The following window shows the setup of the Trade-in Clearing account.

Setup a new trade-in item

This Item is used to deduct the trade-in amount from the sale, and, deposit the deduction to the Trade-in Clearing account.

1. Go to the Lists menu, choose Items and click New.
2. Enter the Item Number and Item Name.
3. Select the I Sell This Item option then enter the Trade-in Clearing account in the Income Account for Tracking Sales field. You will receive a warning message regarding the type of account selected. Click OK and disregard the message.
4. Click Selling Details and enter the relevant Tax Code.
5. Click OK and return to the Command Centre.

The window below shows the trade-in item setup.

What steps are needed to record a sale that includes a trade-in entered in MYOB?

There are only three steps to record a trade-in.

Step 1 - Record the sale Invoice that includes the trade-in deduction

After creating a Card for the customer:

1. Go to the Sales command centre and click Enter Sales.
2. Select the Customer's Card.
3. Enter the Invoice # and Date.
4. Enter the Ship quantity of the item being sold. Enter the Item Number, Description and Price.
5. On the second line, enter a negative one (-1) in the Ship field. Enter the Item Number of the new Item that was setup and then enter the Price, being the value of the trade-in.
6. Enter the other transaction details as required and then click Record.

The above steps will deduct the value of the trade-in from the sale and deposit it into the Trade-in Clearing account which is the linked account for the Trade-in Item.

The window below shows a sample Invoice with the trade-in deduction.

Step 2 - Create a Bill for the purchase of the trade-in item.

Before recording the Bill, you will first need to setup a Supplier type Card for the customer, and an Item for the ‘thing’ being traded in. When setting up this Item, ensure that the I Purchase This Item option is activated and that the relevant cost of sales account (5-xxxx) is selected (You may also want to select the I Inventory This Item and also the I Sell This Item options).

1. Go to the Purchases command centre and click Enter Purchases.
2. Select the Supplier Card that was specifically setup for the customer.
3. Click the Layout button, choose Item and click OK.
4. Enter the Purchase #, Date, Memo and the other purchase details.
5. Enter the quantity Received, Item Number, and then enter the Price - using the same price as entered for the trade Item on the sales Invoice. Enter this amount as a positive - $100.00.
6. Check the transaction then click Record.

The window below shows a sample Bill for a traded-in item.

Step 3 - Close the Bill for the trade-in item

The Trade-in Clearing account, which was used to enter the trade-in deduction, is used to pay the Bill for the purchase of the trade-in item. This will post a withdrawal to the Trade-in Clearing account, leaving it with a zero balance.

1. Go to the Purchases command centre and click Pay Bills.
2. Select the Supplier Card that was specifically created for the customer.
3. Click the Pay From Account option then enter the Trade-in Clearing account in the adjacent Account field.
4. Enter the Memo, Date and Amount.
5. Enter the Amount Applied against the Bill for the trade-in item.
6. Check the transaction details then click Record.

The window on the next page shows a sample of the Pay Bills transaction. This will close the Bill and clear the Trade-in Clearing account balance.