Boat Sales Basics - Special Functions

There are several special functions that will be covered in this section. They include Bundling Serialized Items, Building a Bundle, Building a Package, Entering Accessories on a Sales Contract, and Entering Brokerage Boats Into Serialized Inventory.

Bundling Serialized Inventory Items (Boat Inventory Maintenance)

Bundling refers to combining a Serialized boat with Serialized motor(s), trailer and/or other item(s) for resale. Each component of the bundle keeps its own Price and Cost on a sales contract (in contrast, a Package lists one Price and Cost for all components).

Why would I want to bundle serialized items?

When a boat is bundled together with a motor and/or trailer, the system will automatically list all components of the bundle when the boat is put on a contract.

For example, you put a boat on your show room floor which you purchased from ABC Boats with a motor you purchased from XYZ Motors. Both items exist as separate Serialized items in your inventory. Since you want these two items sold together, you would bundle the two components.

Where do I bundle a boat with a motor or trailer?

In the Boat Inventory Maintenance screen, enter the Vendor ID of the serialized boat in the Vendor ID field and then enter the Model in the Model ID field or press F6 to list models. Then click on tab 5 Packages/Bundles. In the Bundles grid, fill in the information such as the Type of item (Motor, Trailer, Other), Unit ID, etc. for each motor, trailer, or other item to be bundled.

Creating a Model Bundle (Bundle File)

A Bundle is used to quote one price for a combination of boat, motor, trailer, and/or other item models purchased from different manufacturers. The bundle is viewed as one item for pricing purposes until inventory items for each model are added to a sales contract. When a Bundle is created in Bundle Maintenance, the price of the Bundle is the total price of all items included in the bundle. When a bundle is added to a sales contract by Retrieving a Bundle, the boat price is the total price from the bundle file, while the remaining items in the bundle are priced at zero. As serial numbers are assigned to each item on the sales contract, the inventory price for the item is added to the contract.

Why would I want to build a Bundle?

A Bundle allows you to quote one price for a specific combination of boat, motor, trailer, or other models. Some dealers may also refer to this as a package.

Where do I use a Bundle?

Bundles are used in Quotes and Sales Contracts.

A Bundle can be added to a Quote in Quote Maintenance by pressing F6 or by clicking the Retrieve Bundle F6 link in the Command Panel. The system will automatically fill in the item grid with each model that was defined in the selected Bundle. The boat model will have the total price of the Bundle and all other items are priced at zero.

There are two ways you can add a Bundle to a Sales Contract in Sales Contract Maintenance:

The first way is by Pressing F6 or by clicking the Retrieve Bundle F6 link in the Command Panel when at the Serial Type field. The system will automatically fill in the item grid with each model that was defined in the model bundle. The boat model will have the total price of the bundle and all other items are priced at zero. This is useful for quoting a single price for a combination of boat, motor, trailer, and/or other models. Serial numbers for each model can be assigned after the bundle has been added to the sales contract.

The second way is by adding a serialized boat that has bundled inventory items. When you add the boat to a sales contract, the system will automatically fill in the item grid with each bundled inventory item and its price defined for the boat in the Packaged/Bundled tab of Boat Inventory Maintenance.

Building a Package

A Package is a combination of serialized inventory items (i.e. boat, motor, trailer, and other) purchased from the same manufacturer which has one price for the entire combination.

The packaging process starts with what DockMaster calls Model Association. This is an association between a boat option and a motor, trailer, or other model. The process of associating a boat option with a motor, trailer, or other model forces the system to create a non-serialized inventory item for that motor, trailer, or other model when the boat is put on a purchase order. The serial number(s) can be assigned when the boat is received. Dealers who regularly exchange motors and trailers between boats should create model associations for all motor and trailer options.

NOTE: A Model Association can be made for standard or non-standard options.

Where do I create an Option that will become part of a Model Association?

In Boat Model Maintenance, enter the Model ID in the Model ID field or press F6 to select from a list models. Then click on tab 4 Options. Add the option in the Options grid if needed. Then put the cursor on the row of the option for which a model association is to be created. In the Option Model Association section select the Type of Model (Boat, Motor, Trailer, or Other), enter or select the Model ID, and enter the count for the number of this model that should be associated with the option. Click the Update Association button to take

How do I unpackage a motor or trailer option?

When you exchange outboard motors on two stock boats, you will need to unpackage the motors and then re-package them.

In the General tab of Boat Inventory Maintenance enter the Unit ID of the boat you wish to unpackage in the Unit ID field or press F6 to select from a list boats. Then click tab 5 Packages/Bundles. Put the cursor on the row of the item you wish to unpackage and press the F7 key or click the Delete Row F7 link from the Command Panel. Then Click Save button to save the changes.

Entering Accessories on a Sales Contract

Accessories are items which will need to be rigged by the Service Department. Accessories can be items form your Parts Inventory, Accessory File, or defined at the time of entry.

What is the reason for the Accessory File?

The Accessory file is used to build a database of accessories which can be added to a sales contract. This confines the list of items available to be chosen when a salesperson adds an accessory to a sales contract, thus reducing the chance of error if the salesperson had to search the entire parts inventory instead. This also enhances communication between the Sales and Service Departments.

This file allows you to assign a Price and Estimated Cost to each accessory. Therefore, when a salesperson is quoting a deal prior to adding accessories being rigged, the deal can be quoted accurately by capturing a Price and Estimated Cost of accessories. The Actual Cost of accessories is added to a sales contract when the work order used to rig the accessories is billed.

Where are the price and cost of accessories reflected on a sales contract?

The total price of all accessories added to a unit on a sales contract will increase the Price of the unit. The actual cost of accessories will be included in the cost of Prep and Rigging (not the cost of the boat).

Service Interface

The interface to the Service module occurs when a rigging request for accessories is made. Below are ways in which a rigging request can be made for an accessory on a sales contract:

If you add a serialized boat to a sales contract that does not have any accessories defined for it but there are accessories defined for the boat model, you can add the accessories to the contract in the Accessories To Rig section in the Main tab of Sales Contract Maintenance. You can then create a Rigging Request by pressing F10 or clicking the Rigging Request F10 link in the Command Panel to create a Rigging work order for these accessories. The rigging request can be E-mailed to the Sales Manager, Service Manager, and Parts Manager if each has an E-mail address defined for their clerk and their E-mail address is defined in the E-mail Addresses tab of Boat Sales Parameters. When the rigging request is created, the accessories will appear in the grid in blue.

If you add a serialized boat to a sales contract that has accessories defined for it, these accessories are automatically added to the Accessories To Rig section in the Main tab of Sales Contract Maintenance and will appear in blue. It is assumed that a rigging request has been made for the serialized unit in Boat Inventory Maintenance.

If you add a boat model to a contract that is not in stock and then order the boat, when you receive the order you can create a rigging request/work order for the accessory in the Inventory Receipts Detail form by pressing F10 or clicking the Rigging Request F10 link in the Command Panel. When you select the newly received serialized boat in the sales contract, the accessory is automatically added (in blue) to the Accessories to Rig section in the Main Tab of Sales Contract Maintenance.

The accessories to be rigged will appear in the Comments section of the Miscellaneous Info tab in the Work Order Maintenance form. The Rigging ticket can be E-mailed to the Sales Manager, Service Manager, and Parts Manager if each has an E-mail address defined for their clerk and their E-mail address is defined in the E-mail Addresses tab of Boat Sales Parameters.

Accounting for Accessories

The following information will be used to demonstrate the accounting for accessories:

Price Estimated Cost Actual Cost

Cost Guard Package $150.00 $100.00 $90.00

Life Preservers $300.00 $200.00 $185.00

When a Rigging work order that has accessories is billed PRIOR to contract closing, the following accounting entry will be made for the sale of accessories (all other dollar figures are ignored for our example):

DEBIT Cash, Accounts Receivable, etc. 450.00

CREDIT Sales Income 450.00

DEBIT Unit Cost of Sales 275.00

CREDIT Unit or Rigging Inventory 275.00

For dealers who rig work orders AFTER contract closing (i.e. sell the boat in winter and rig it when they pick it up in spring), the following accrual entry will be made for the difference between the Estimated Cost of all accessories on the sales contract and the amount billed on the rigging and prep work orders.

Using our example, the following accounting entry is made when the contract is closed:

DEBIT BMT Rigging Cost of Sales 300.00

CREDIT Accrued Rigging Inventory 300.00

When the work order(s) is billed, the accounting entry will be as follows:

DEBIT Accrued Rigging Inventory 275.00

CREDIT Rigging Sales 275.00

Note: The Accrued Rigging Inventory account may need to be adjusted for any discrepancies between the Estimated Cost of all accessories on the sales contract and the Actual Cost of all accessories billed during the work order billing process.

From our example, the Estimated Cost of all accessories is $300.00 and the Actual Cost is $275.00; the following adjusting entry would need to be made:

DEBIT Accrued Rigging Inventory 25.00

CREDIT BMT Rigging Cost of Sale 25.00

Entering Brokerage Boats Into Boat Inventory

The following steps should be followed prior to entering brokerage boats into inventory:

Create a Department for brokerage boats. To create a new Department, from the menu select, File Maintenance, Department File.

Before you can enter a brokerage boat into serialized inventory, you must have a model on file. There are two methods for dealing with brokerage models in Sales Management. The method you choose depends on the information you wish to see in reports.

BROKERAGE MODEL METHOD 1

Enter ONLY ONE miscellaneous model (see Boat Model Maintenance) which will be used for all brokerage boats. Enter the boat in Boat Inventory Maintenance. When entering the boat, use the miscellaneous model and change the List Price, Cost, Color, etc. to match the boat.

If you use this method, you will need to track the boat length, beam, draft, weight, motor rating, hull type, etc. in the Comments tab or Custom Information tab in Boat Inventory Maintenance.

To produce easily definable reports, we recommend that you use the Custom Information tab to store additional data. Custom file dictionary items may need to be created to access this information in custom reports.

BROKERAGE MODEL METHOD 2

Enter a model for each brokerage boat (unless the brokerage boat model matches one of the new models you sell). Then enter the boat in Boat Inventory Maintenance using the model you created.

This method allows you to print very detailed inventory reports for your sales personnel using the canned BMT inventory reports. See Sales Management Report Generator.

Accounting for the Sale of Brokerage Boats

The accounting for brokerage boats is handled differently from most boat sales. Since boat brokerage is on a commission basis, the boat is probably not an inventory item (a model is not defined for the boat) and therefore has no actual inventory cost.

There are two methods to account for brokerage boats in the DockMaster application. The method you choose depends on the accounting experience of the person who closes the sales contract.

BROKERAGE ACCOUNTING METHOD 1

This method assumes that you want the system to handle the accounting entry automatically without any manipulation by the person closing the brokerage contract.

The Cost of the boat should be entered as Sale Price X (1 – Commission %)

The BOAT Sales module uses the G/L account numbers located in the Boat Sales Accounts tab in the Department Maintenance screen to make accounting entries when a sales contract is closed. The Boat Sales Account tab in Department Maintenance is shown below.

A department should be setup for brokerage boats. This department should be attached to all brokerage boats put into serialized inventory. The Inventory, Sales, and Cost of Sales account fields should contain the following accounts:

Inventory - Liability Account (Due to Brokerage Boat Owner)

Sales - Income Account (Brokerage Commissions)

Cost of Sales - Income Account (Brokerage Commissions)

NOTE: The Sales and Cost of Sales account should be the same G/L account.

The effect of this accounting setup is shown in the example below:

Sale Price = $10,000

Brokerage Commission % = 10

Cost of Boat = $10,000 x (1 – 0.10) = $9,000

Using the accounts shown above, the system will make the following accounting entry when the sales contract is closed as a cash sale:

DEBIT Cash 10,000.00

CREDIT Brokerage Commissions 10,000.00

DEBIT Brokerage Commissions 9,000.00

CREDIT Due to Brokerage Boat Owner 9,000.00

The net effect of this entry is a $1,000.00 brokerage commission.

Paying the Brokerage Boat Owner or Agent

When you issue a check or create an invoice in Accounts Payable that is payable to the boat owner or agent, the accounting entry will be as follows:

DEBIT Due to Brokerage Boat Owner 9,000.00

CREDIT Cash or Accounts Payable 9,000.00

BROKERAGE ACCOUNTING METHOD 1 is the preferred method if you want your sales reports to reflect the correct profit and margin

BROKERAGE ACCOUNTING METHOD 2

This method assumes that the person closing the brokerage contract will be able to manipulate the accounting entry generated by the system (by choosing G/L Distribution button on Closing tab (11) of Sales Contract Maintenance).

NOTE:

The Cost of the boat is left at Zero.

The Department should be setup as described in the previous section BROKERAGE ACCOUNTING METHOD 1.

Using the example in the previous section, the system will make the following accounting entry when the sales contract is closed as a cash sale:

DEBIT Cash 10,000.00

CREDIT Brokerage Commissions 10,000.00

Click on the G/L Distribution button on the Closing tab of Sales Contract Maintenance and change the CREDIT to Brokerage Commissions to 1,000.00 instead of 10,000.00 and add another account (Due to Brokerage Boat Owner) which will be credited for $9,000.00. The new entry will look as follow:

DEBIT Cash 10,000.00

CREDIT Brokerage Commissions 1,000.00

CREDIT Due to Brokerage Boat Owner 9,000.00

Paying the Brokerage Boat Owner

When you issue a check or create an invoice in Accounts Payable that is payable to the boat owner or agent, the accounting entry will be as follows:

DEBIT Due to Brokerage Boat Owner 9,000.00

CREDIT Cash or Accounts Payable 9,000.00