Basic Financial Accounts

There are three basic financial accounts:  Income accounts, Cost of Goods Sold (COGS) accounts, and Inventory accounts. In addition, there are accounts for Inventory, Payroll, and Taxable items. Rounding out the accounts are your Accounts Payable (A/P), Accounts Receivable (A/R), and Sales Tax Payable accounts.

  • Income Accounts

Income accounts track the sale items.

ClosedExample:

  • The INCOME:Parts Sales:Parts New account contains the dollar amount for Parts New items from a job. In your accounting software, a report on INCOME:Parts Sales:Parts New provides you the total amount you charged your customers for OEM parts. For QuickBooks, since the account is structured using the colon (:), you can generate reports at total and subtotal levels. You can see a grand total for Part Sales as well as individual totals for Used, AM, and other Part types.
  • Cost of Goods Sold (COGS) Accounts

COGS accounts track your cost of sale items.

ClosedExample:

  • The COSTS:Parts Costs:Parts New account contains the dollar amount of your costs for Parts New items from your ROs. In your accounting software, a report on COSTS:Parts Costs:Parts New provides you the total amount you spent for your customers' Parts New sales. Since the account is structured using the colon (:), you can generate reports at total and subtotal levels. You can see a grand total for Part Sales as well as individual totals for Used, AM, and other Part types.
  • Inventory Accounts

Inventory accounts can be used to track your cost of sale items rather than the COGS accounts.  

ClosedExample:

  • The INVENTORY:Part Inventory:Parts New inventory account contains the dollar amount of your cost for Parts New items from your open ROs. In your accounting software, a report on INVENTORY:Parts Inventory:Parts New provides you the total amount you spent for your customers' Parts New sales before the RO has been closed and transferred.
  • A report on COSTS:Parts Costs:Parts New provides you the total of the amount you spent for your customer's paint Parts New sales after the sale (RO) has been transferred. The transfer of a repair order from RepairCenter to an accounting program initiates a journal entry. The journal entry transfers the amounts from the inventory accounts to the corresponding cost of goods sold accounts.
  • Accounts Payable

Used to track what you owe your vendors. In your accounting software the account type must be A/P (Accounts Payable).

  • Accounts Receivable

Used to track what your customers owe you. In your accounting software the account type must be A/R (Accounts Receivable).

  • Sales Tax Payable

Used to track how much you owe for sales tax. In your accounting software the account type must be OCLIAB (Other Current Liability).

The income and cost of goods sold can each be marked as taxable, payroll, or inactive.

  • Taxable Accounts

Each accounting item must be marked as taxable/non-taxable, reflecting your shop’s taxing procedure. Only the income account is affected by the taxable choice.

  • Payroll Accounts

Each accounting item must be marked as payroll/non-payroll, reflecting your shop’s payroll procedure.  Only the income account is affected by the payroll choice.

  • Inactive Accounts

If you do not wish to set up one or more user-defined account groups to track a unique sale item, you must mark the group inactive.  The entire item: income, cost of goods and inventory accounts are affected. Inactive accounts will not transfer to your accounting system.

Note: Do not mark a mandatory account group inactive. These account groups are required based upon your estimating systems. (See Profit Center Setup for the mandatory account group.)

See Also

General Settings

Accounts Setup

Account Naming/Numbering