AvSight Inventory Management—Creating and Receiving Lots and Consignments
This article will cover the basics of creating parts purchased as a lot or consignment in the AvSight system.
Creating Condition Codes
What Are Owner Codes?
Working with POs
Information needed to complete the steps:
|Part Number||Condition Code|
AvSight provides the ability to receive and account for parts that are received either as a Lot or on consignment. Lots are quantities of parts purchased as a group for a set price. Consignments are similar but are owned by an entity outside of the company and are paid for as the parts are sold. In this article, we will review the basics of creating, receiving and accounting for Lot and Consignment orders in the AvSight system.
Lots vs. Consigments vs. Spec Purchases
AvSight has three ways to acquire, inventory and account for parts. Below is an explanation of each method:
Spec purchases are the simplest to work with. Each part is acquired for a fixed (specific
or Spec) cost and that cost serves as the basis for the acquisition cost and is
known from the outset. That cost is
deducted from the sales price of the part to determine the profit margin. Spec purchases are associated with an Owner Code
of type Spec.
Lots Lot purchases are usually groups of parts purchased as a lump sum rather than as individual parts. As a result, there is no individual acquisition cost, but it is calculated as the parts are sold. See the Chargeout Rate section below. Lot purchases are associated with an Owner Code of type Lot.
Consignments Consignments are parts that are owned by others, but sold by the company. They may involve large groups of parts or single items. Like lots, consignments do not carry an individual acquisition cost, but it is calculated at the time of the sale. Consignments are associated with an Owner Code type of Consignment. See Creating a Consignment Owner Code section below.
Creating a Lot
The first step in creating a lot is the Owner Code that will be associated with the Lot. If there is already an appropriate owner code, skip to the section Creating a PO below.
Creating a Lot Owner Code.
Log onto AvSight and open the Administration tab. Navigate to the Financial Admin tab and select the Owner Code Master button to open the Owner Code Master screen.
Select New on the Owner Code screen to open the New Owner Code dialog box.
1) Owner Code Add a meaningful name and optional description for the owner code.
2) Lot Code? Checking this box is what sets the owner code to a Lot Owner Code.
3) Chargeout Rate The chargeout rate is the percentage of each sale that is applied to the Acquisition Cost to reduce the Remaining Cost. For example, the Acquisition Cost of the entire lot is 1,000.00. If the Chargeout Rate is set to 10%, 10% of the sale price of each part is deducted from the Remaining Cost. If a part is sold for 100.00, the chargeout rate of 10%, or 10.00 is deducted from the Acquisition Cost of 1000.00, leaving 990.00 remaining cost. The 10.00 will become the Cost of Goods Sold, or Acquisition Cost of the part for accounting purposes. If a part needs to be repaired prior to sale, the cost of the repair is deducted from the sales price prior to applying the chargeout rate.
|$100.00 Sale price of part||$1000.00 Acquisition Cost of Lot||$100.00 Sale price of part|
|X .10 10% Chargeout Rate||-$10.00 Acquisition Cost of part||-$20.00 Repair costs|
|$10.00 Amount to be deducted from the Remaining Costs field.||$990.00 Remaining Cost of Lot||$80.00 New cost basis|
|X.10 Chargeout rate|
|$8.00 Acquisition cost|
Once the Remaining Cost reaches 0.00, all parts sold after that will have a COGS or Acquisition Cost of 0.00 and a profit margin of 100%.
4) Acquisition Cost/Remaining Cost Initially both of these fields will be the same, since no parts have been sold from the lot. Enter the initial amount paid for the lot in both fields. As parts are sold, the Remaining Cost will be reduced automatically by the percentage specified as the chargeout rate.
5) Acquisition Date Add the date that the lot was acquired.
Lot Inv ID Typically used for the Inventory ID of the lot when received. This inventory should be set to protected status and the quantity should be set to 1. Inventory Acquisition costs will automatically be kept in sync with the remaining cost of the owner code.
Move Repair Costs to Lot? This setting is only used when the costs of repair will not be kept at the stock line and are instead added to the Lot Remaining Cost.
Creating a Consignment Owner Code
Creating a Consignment Owner Code follows the same initial steps as the Lot Owner Code, except instead of working in the Lot Information section of the New Owner Code screen we will be working in the Consignment Information Area.
1) Owner Code Add a meaningful name
and optional description for the owner code.
2) Consignment Code? Checking this box is what sets the owner code to a Consignment Owner Code.
3) Default Consignor This will be the account of the entity that owns the parts consigned.
4) Consignment Rate/Accrued Cost Consignments are calculated differently than Lots. Instead of an Acquisition Cost, consignments are assigned a Consignment Rate. The Consignment Rate is the percentage of the sale that will be payed to the owner of the consigned parts. As each consigned part is sold, the consignment rate is automatically accrued in the Accrued Cost field. This amount becomes the Consignor Payable amount. For example: Assume a consignment rate of 20%. If a part is sold for 100.00, the accrued cost will increase by 20.00.
$100.00 Sale price of part
X.20 Consignment Rate
$20.00 Amount added to Accrued Cost
With consignment sales,
repair costs are the responsibility of the consignor and are deducted from the
sales price of the part prior to calculating the accrued cost. Continuing with the example above, the 100.00
part required 20.00 in repairs in order to be saleable. The calculations now are as follows:
$100.00 Sale price of part $80.00 Cost basis
– $20.00 Repair costs X .20 Consignment rate
$80.00 New cost basis $16.00 Amount added to Accrued Cost
The rest of the fields in this section are optional.
Move Repair Cost to Accrual This is only used when the costs of repair will not be associated with the parts, but are instead added the Accrual Cost in the owner code. If this setting is used, the repair cost will not be deducted from the consignor payable calculation and therefore require this to be done manually in order to pass these charges on to the consignor.
Acquisition Date The date the consignment was acquired.
Creating a Purchase Order
In order to be able to acquire and receive a lot or consignment, a PO is required. Creating a PO for lots and consignments follows the same basic steps as a Spec PO does. (See related articles below).
Begin by navigating to the Purchase Order tab in AvSight and select New in the Purchase Order screen.
On the New PO screen, select the vendor that is supplying the lot or consignment and choose the PO Type from the drop down list. Enter any additional information desired. All fields except the Vendor and PO Type are optional.
Click Save when finished to open the PO and add a line item. If not already selected, select the Lines tab on the PO screen and click new to open the New Line dialog box. The Lot and Consignment POs require a single line. The single line provides the defaults for the parts being received (Part Number, Condition Code, Owner Code, Warehouse). All other line items will be created as the Lot or Consignment is received. For example, if the majority of the parts being received are in As Removed condition, marking the main line item of the Lot or Consignment PO in “AR” condition will default the lines added by the Receiver to AR.
NOTE: The line in the PO must have the correct owner code (Lot Owner for a Lot PO and Consignment Owner for a Consignment PO).
Enter the required information and any additional information desired and click Save.
Receiving Items Against a Lot or Consignment PO
Open the AvSight Operations app by clicking the App Launcher icon in the upper left of the screen and choosing AvSight Operations. Select the Receiving tab and enter the PO number of the PO to be received against. Click Search to open the PO.
There are two methods that can be used to receive items against a Lot or Consignment PO:
Inventory Import/Upload Using inventory upload uses a spreadsheet containing the information for all of the items being received. Inventory upload is faster when receiving large numbers of items and has the advantage of automatically creating any needed Part Masters. Uploading and importing inventory is covered in the article Creating Parts
Individual Receiving Receiving items individually while slower, offers the advantage of inspecting the parts as they are received and allowing the condition, part number and serial number to be verified and adjusted if necessary. Receiving items individually is covered in this article.
The Receiving Process by the Numbers
1) Screen Help The screen help button provides information on the receiving process and provides a quick reminder of the receiving steps.
2) AWB Number This is an optional, although helpful field to provide the freight bill number for the items being received,
3) Use Vendor as Source Checking this box uses the vendor specified on the PO as the source for all of the items received. If the source differs between parts or the source is different from the vendor, Mass Update can be used to update the Source. NOTE: Source is the Obtained From field in material certifications.
4) + Clicking the + will add lines to be received. Fill in the number of lines to be received. It is not recommended to receive more than 100 items at a time. Working in smaller batches is more efficient. NOTE: The PO will start with one line that is not editable. At least one new line is required to receive items associated with the Lot or Consignment.
5) Show Receipts Clicking this button will show all items already received against this PO. NOTE: Items that have been received via import, will not display here.
6) Mass Update After adding additional lines, a checkbox will appear between the serial number and location fields, along with one at the top of the column. Selecting any of the check boxes enables the Mass Update button allowing Tech Data to be added to any line items checked. The top checkbox selects all items.
7) Mass Upload Selecting any or all line items enables the Mass Upload button. Clicking Mass Upload opens a text box allowing multiple items to be received at once by entering the Part Number, Condition, QTY Accepted and Serial number for each item separated by commas.
Based on the descriptions
above, there are several choices to proceed with entering the information:
1) Manually entering the data for each blank on each line. This is the slowest method, but the only option if each part has unique information.
2) Using mass upload. This is especially helpful if the part information is already in some written form—i.e. the data is in a spreadsheet and can be exported as a comma separated value file (CSV) and copied and pasted into the mass upload Lines box. HOWEVER, the data must be formatted correctly with each item on a separate line and only the Part Number, Condition, Qty Accepted, and Serial Number pasted into the box with each separated by a comma.
3) A combination of the first two options can be used. Unique data can be entered manually or via mass upload and the common data may be entered via Mass Update,
When all data is entered, click Receive to move to the Attachment Documents screen. This will provide an opportunity to upload any documents that may need to be associated with any of the items received. (See article Receiving for more details). When finished click Done to complete the receiving process.
Working With Purchase Orders
What Are Owner Codes ?
Creating Condition Codes