Trade In Equipment



Overview

This article will discuss trade in credit. Trade-In for Credit allows you to track your trade-ins by one vendor. This is the recommended way for trading in equipment.


Topics included in this article

• Set Up Vendor
• Set Up Item Category
• Create an Item
• Create the Purchase Order
• Create an Asset Sale Contract

Set Up Vendor
 

1. To set up a vendor, go to File Maintenance > Vendor File.

2. Set the name of the vendor as Trade-In.
 

Note: This will allow you to track your trade-ins by one vendor. 

3. When complete, click OK.

Set Up Item Category
 

To set up an Item Category
Expert: Program Menu > Configuration > Item Configurations > Item Categories
Elite: Configuration Gear > App Configuration > Item Configuration > Item Categories

 

1. Select the add button. Create a category for trade-ins.


2. If needed, set the GL to a number that points to trade-in.

3. When complete, click OK.

Create an Item
 

After the Item Category has been created, create an item called Trade In. This “item” is only used to offset the value of the item being traded in so you end up with a zero dollar purchase order. Looking at this item’s history will show the value of trade-ins as well.
 

To create the item, go to File Maintenance > Item File and click Add.
 

1. Call the item Trade-Ins.

2. Set the type as a ‘Sales – Normal’ item.

3. Choose the category that you created earlier.
 

Note: If your state law requires tax to be charged on the total purchase price of the sales item then make this item a non-taxable trade.

4. Under the Asset Tab, check the box for "bought used".

5. Under the Options Tab, check the boxes for Bulk Item and Hide on Website.
 

6. When complete, click OK.

Create the Purchase Order
 

Write a purchase order for the item you are taking as a trade-in. If the customer is trading in multiple items, you will need to write a separate PO for each item.

1. Add the trade-in item to the PO with a negative quantity (Shift N/Enter in the Qty field). Enter the same value as the trade-in item (the item you are getting from your customer). This will make your PO have a zero-balance due. The trade-in item record will indicate what you paid but no invoice will be created.

2. Add the item you are taking in as a trade. The purchase price will be the trade-in value you are giving to your customer.



3. Use the Add as New Item right-click feature. If you plan to have it for sale only - add it as a Sale Item. Add as a rental item if you plan to rent it.

4. Receive items from PO.

Note: If you have previously owned the item, you can use the same item number and you will maintain the history of the item in the same record. If it is an item you have not previously owned, you can create a new item.
 

Create an Asset Sale Contract
 

1. Write an Asset Sales contract to your customer for the item that they are purchasing.

2. Add the item they are purchasing.

3. Then, add the “Trade-In” item to the contract with a quantity of negative one (Shift N/Enter -1 -- in the Qty field) and the trade-in allowance you are giving. This will deduct the trade-in value given from the balance due on the invoice. If the item has been set up as non-taxable, tax will be charged on the value of the sales item before the trade-in is deducted.

Refer to your state laws on taxable sales.

If there are repairs and maintenance required for the item traded in and you want to add the value of these costs to the item, follow the procedures in the Repairs Build article.



Related articles

Asset Sale
Item Category
Purchase Orders
Repair Builds