This article explains how to setup rental equipment in ESC using inventory items and billing codes.
Before You Begin:
- Setup the rental equipment as an inventory part with a Serial Part type in the Inventory Entry screen (under the Inventory menu). Make sure that the Post to Equip field is set to Yes and that the Inventory and Cost Accounts are set to the actual accounts.
- Create an Asset Account for Rental Inventory in ESC. Run the accounting integration wizard and add the account to your accounting software as well.
- Create a Billing Code called Rental (Sales → Enter Billing Codes). Set the type to Material and the description to anything you want. There is no Sales Debit or Sales Credit. The Cost Debit should be the Rental Inventory Account and the Cost Credit should be the same Cost Account that is set in the inventory part.
- Create an Equipment Type called Rental (Customer Info → Enter Equipment Types).
- When purchasing this part, receive it into inventory.
- Create an invoice. On the line item, select the part. When the invoice is saved the inventory part will be taken out of inventory and the equipment record created in ESC. When posted to your accounting package, it creates a Journal Entry for Cost of Goods Sold (debiting the Cost of Goods Sold account and crediting Inventory)
- On the next line item, select the Billing Code, Rental and enter in the cost, which will be in the Mat. Cost field, bottom left of invoice screen. If you do not want this line to print on the invoice, uncheck the Print box. When posted to your accounting package, it creates a Journal Entry that debits Rental Inventory and credits the Cost of Goods Sold account. This effectively transfers the cost of the part to the Rental Inventory account.
- Save the invoice and post to your accounting package.
- Modify the Equipment record and change the type to Rental. This will enable you to run Equipment reports by Rental type.
- Create a Service Agreement for the Rental for recurring invoices.
- When customer returns the rental part, create a Credit Memo with the exact same line items as the original invoice. When posted to your accounting software, it will create the reversing entries and put the part back into inventory.
- Save the credit memo and post to your accounting package.
- Delete the Equipment Record.