A solution for equipment rental

Software: MoneyWorks accounting software

MoneyWorks is a back-end accounting system which helps to manage your business finance. You can create recurring invoices for those customers who have rent the equipment on a monthly basis and use the inventory module in MoneyWorks to track the movement of the loan item which happens occasionally but not replacing the resource planning and scheduling system.

If you are looking for resource planning and scheduling for an equipment rental (a.k.a. equipment hire) or loan of equipment, then you should be looking for a front-end solution such as JobPro Central or a custom app developed from FileMaker, etc., which possible to integrate with the accounting software to form a complex system for small businesses. An equipment rental solution takes care of resource booking, damage claims, equipment maintenance, resource crash checking, availability of the resources (both human and equipment), calendaring, etc.

Contact us if you like to know more about JobPro Central software or to develop an app for your business with FileMaker.

The workaround solution with MoneyWorks is creating multiple warehouses in version 8 and use the stock transfer journal to allocate the loan item to a temporary loan store. The stock transfer journal transfers the quantity and item cost from one location to another without affecting the cost of goods sold of the profit and loss report. Then, use a Sales Order or Sales Invoice to record the loan.

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Sales Order is non-posting, it will not affect the stock on hand nor cost. Issue a Sales Order when the product is on loan and delete it once the item returned. This method works if you are not using the Sales Order as part of your daily operation such as using it as a sales confirmation. If not, you may have a missing order number and confusing.

Another alternative is to use a Sales Invoice transaction. Sales invoice method is to create a sales invoice of the loan item with $0 selling price (You can flag the invoice as Loan to ease filtering if required). Although the selling price is $0, the item cost gets transferred from the inventory asset to the cost of goods sold.

You have to record a reverse Sales Invoice (Credit Note) when the loan item returned to adjust the item cost and quantity on hand. Then, issue a Sales Invoice with a selling price when the customer converts the loan item to sales.

It may not be a good solution as this method causes a movement in the cost of goods sold unless the conversion rate from loan to sales is high, you should discuss with your accountant before implementing.

Another possibility is converting the inventory to a fixed asset when using the item as hire equipment. You can remove the product with a WriteOff journal, transfer the inventory cost to a fixed asset account. Then, create a new non-inventory item with the Count feature turned on to track the item movement. So, the count decrease when a Sales Invoice has posted ($0.00 selling price), and count increase with a reverse Sales Invoice. Depreciation journal has to record either monthly or yearly in this case since the rental equipment is now part of your fixed assets. This method seems better as all other accounts remain unchanged when quantity moved.

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Lastly, you may consider creating a new company file, which separated from your financial data to track the rent or loan equipment since MoneyWorks allows the user to create multiple company files in the same system without incurring additional cost.

Depends on your need, discuss with your accountant to find out which is a better alternative to use. However, do consider a dedicated system, such as customised from FileMaker or an off-the-shelf solution like JobPro Centre to record your equipment loan/rental if equipment rental is your business. You should get the right tool to solve your business challenges instead of compromising with a workaround solution.

Sign up a free demo to find out how MoneyWorks helps you manage your business finance or contact us if you are interested in developing an app to ease the operation.

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