What are Owner Codes?

Owner Code Definition

Owner codes are the foundation for the identification and control of inventory within AvSight. They not only control the financial calculations done within transactions but are also useful in grouping and identifying the inventory and its performance. Do you need to track the performance of a large purchase separately from your other inventory?  Assign it its own Owner Code. Need to track a consignment?  Give it its own Owner Code.  If you consider a large crowd as representing all the parts in your inventory, it is easy to see how the last names could be used to identify the families in the crowd. Owner Codes can be used in the same way.

There are three types of owner codes:

LOT Owner Codes

LOT Owner Codes are created by setting the checkbox “Lot Purchase?” to true. By checking this box, the fields “Acquisition Cost,” “Acquisition Date,” “Remaining Cost,” and “Chargeout Rate” are required to be entered when setting up the Owner Code.

When a line of inventory is created or received using this type of owner code, all transaction costing are handled using LOT Accounting. All inventory lines will have an inventory Acquisition Cost of $0 until shipped. Once shipped, the Acquisition Cost will be calculated by first subtracting any Repair Costs on the part from the sales price and then taking the remaining amount and multiplying by the Chargeout Rate: Acq Cost = (Sale Price – Repair Cost) x Chargeout Rate). The acquisition cost is used to pay down the remaining cost on the LOT. For example, if a line of inventory without any repair cost is sold for $100 and the Chargeout Rate on the owner code is 20%, the cost on the sale will be set to $20, thereby showing a profit margin of $80. Acq Cost = (100 – 0) x .20 = $80

Any Acquisition Costs calculated during LOT sales are applied to reduce the Remaining Cost on the LOT. In the previous example, if the Remaining Cost on the LOT were $200 before the shipment, the Remaining Cost of the Owner Code would be reduced to $180. ($200 – $20 = $180). Once an Owner Code’s Remaining Cost is reduced to $0, no further calculations for Acquisition Costs will be required, which will result in a 100% margin if no repair costs are involved. Margin = (Sale Price – Repair Cost) – LOT Paydown

Consignment Owner Codes

Consignment Owner Codes are similar to LOT Owner Codes in the following ways:

  1. All parts under a Consignment Owner Code will have $0 Acquisition Cost while in inventory,
  2. An Acquisition Cost is calculated at time of sale based on a percentage set up in the Owner Code
  3. Repair Costs are first subtracted from the sale price before the Acquisition Cost calculation is done.

The difference for Consignments is that the calculated Acquisition Cost would be the amount owed to the Consignor of the parts (becomes your Consignor Payable).

When a line of inventory is shipped on a Consignment Owner Code, the Acquisition Cost is calculated using the “Consignment Rate” set at the Owner Code. For instance, if the sale price is $200, and the Consignment Rate is 20%, the Acquisition Cost calculated on that sale would be $40. This cost would be the amount owed to the Consignor. Margin = (Sale Price – Repair Cost) – Consignor Payable.

SPEC Owner Codes

The last type of owner code is the most common scenario and follows the traditional sales calculations.  When Owner Codes do not fall under a LOT or a Consignment type, they fall under the third type commonly referred to as SPEC or “specifically” costed inventory.  In this scenario, the parts will inherit the cost entered in the Purchase Order and will be displayed under the Acquisition Cost field while in inventory.  These Owner Codes are created by not setting the “Lot Purchase?” or the “Consignment?” indicators described above.  Margin = Sale Price – Repair Cost – Acquisition Cost.

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