Re-renting equipment occur when your firm rents equipment from
another rental firm, and then your firm rents that equipment out to
one of your own customers.
This sub-rental action is useful when the demand for a product such
as a generator, exceeds the number of generators your firm has
available to fill your customers' orders.
Instead of turning away a customer or sending them to the
competition, a re-rental or sub-rental is a way of satisfying a
temporary increase in demand for a certain piece of equipment.
If the extra demand for the equipment remains over a period of
time, your firm should purchase the additional equipment instead of
re-renting.
Generally, when equipment is re-rented or sub-rented from
another rental firm, the other firm gives a 20-30% discount on
regular rental rates.
This enables renting to your customer at your regular rates, but
the gross profit on re-rentals or sub-rentals would only be
20-30%.
Note: Availability checking for Rental equipment in a Re-rent Product Class does not apply even if that equipment belongs to a Group flagged to require availability checking.
When the A/P invoice is received for the rerent of the equipment
from the other rental firm, it will post into rental inventory.
Although the equipment is not part of your rental fleet, creating
Fixed Asset tags enables any disposal to be cleared and all the
proper accounting to occur that result from the sale of the rental
equipment.
For the Rental Revenue account, use the same G/L account for normal rental of the equipment, or setup a separate G/L account to track the rental revenue from re-rented equipment.
Each time equipment in this class is rented, a record is written
to the Re-Rental Transactions file for the rental
revenue.
When the charges from the other rental firm are recorded against
the rental revenue in this program, a complete picture of how often
the equipment is being re-rented and how profitable it has been is
provided.
Supporting sales products and sales parts associated with ordering a service must belong to a Sales Product Class that is flagged to Allow Create P.O. from Contract.
The re-rent order link can also be established when the Purchase Order detail for the re-rental equipment is entered to link the P.O. to a specific Contract.
Each time an item from a Product Class that is flagged as a Re-rent class, is rented a record is written for the revenue into the Re-Rental Transactions file when the Daily Close programs are run.
Each time the Daily Close programs are run, any revenue earned from re-rental (sub-rented) equipment is automatically recorded into Re-Rental Transactions.
Note: In order to qualify as re-rental equipment, the product # must be in a Rental Product Class that is flagged as a Re-Rent class.
Following are three separate approaches to capturing costs:
Note: To manually designate the equipment as re-rental A/P Invoice by P.O. can not be used as Type E for RE-RENTAL is not an option when the inventory purchases come from a Purchase Order.
A window is provided on the Purchase Order Inquiry and on the Qty field of the Contract Details to show the P.O./Contract link and re-rental information.
Refer to Contract/Purchase Order Link Overview for details on this feature.
Converted from CHM to HTML with chm2web Pro 2.85 (unicode) |