Many of our customers at one time or another will have to deal with product demos.  There is more than one way to handle this situation, but most are a variation of the following method.  We have found the following procedure to be the most complete solution to the demo question.

The Scenario

Salesman from XYZ vendor takes $100.00 (cost) worth of product from the jobber to demo a body shop.  Vendor XYZ agrees to reimburse jobber for $100.00 with a credit on the jobber’s account. 

The Solution

1.  Create a Customer entry (6.1.1) for vendor XYZ, using Price Code 98.  You may also want to prevent sales history from being created for sales to this customer.  Field #37 Prevent Sales Hist allows you to do this.  You have the option of disabling posting to all files, or only certain files.  Read the help carefully to determine which options to choose, if any.

2.  Enter a POS Invoice (1.1) and sell the product to vendor XYZ.  If desired, use the Alternate Shipto feature at the bottom of the invoice entry screen <AS>, and choose the body shop that the salesman is visiting for the demo.  This would help keep track of which customers have been shown which product(s), and may be required by the vendor to receive the credit.  This will create a charge on the vendor’s A/R account, which will keep track of credits owed to the jobber.

3. Once credit is received from vendor XYZ, two things need to happen:

a.  Enter a credit adjustment to the vendor’s A/R account (6.5.1).  When prompted for the GL account, choose an account for Demo Expense.   Apply the credit to the invoice(s) involved.  Be sure to proof and post the adjustment.

Note:  If for some reason, even if the vendor only refunded part of the $100.00, make the credit for the full $100.00.  This will clear the initial charge of $100.00 off the account, and debit a full $100.00 to your Demo Expense account.  In the next step, you will enter the actual amount of credit given.

b.  Enter a credit voucher to the vendor’s A/P account (7.1.1).  When prompted for the GL account, use the same demo expense account as from the previous step.  If you are receiving full credit, the debits and credits to the demo expense account will cancel each other out.  If you are receiving less than the original $100.00, the difference will remain in the demo expense account, as it should.  Be sure to proof and post the voucher.