Product Class Defaults

An operator must be assigned a Security Role that allows permission to the Accounting - Product Class Defaults in order to access this Product Class Defaults utility.

TAXES

There are two tax processing methods, each of which impacts this product class differently.
Refer to Tax Maintenance Overview to review the regulations determining the tax selection using either taxing method.

Standard Taxing
For the standard simple tax processing that handles two tax codes, the Tax prompts include:

CHARGE TAX CODE 1

Check this box if equipment in most classes should be charged Tax 1 as defined for the customer or division.
Uncheck this box if equipment in most classes is exempt from Tax 1.
In Canada, Tax 1 is generally GST or HST. In the United States, Tax 1 is State Sales Tax SST.

CHARGE TAX CODE 2

Check this box if equipment in most classes should be charged Tax 2 as defined for the customer or division.
Uncheck this box if equipment in most classes is exempt from Tax 2.
In Canada, Tax 2 is generally PST. In the United States, Tax 2 is generally County, Municipal or Local tax.
Enhanced Taxing
The purpose of the Enhanced Tax method is to allow more than two tax codes to be tracked according to Location, and to be charged on products, services, and Damage Waivers, and to allow for tax exemptions on any or all of these charges.
The Enhanced taxing method can be activated in the Company Taxing Parameters.

TAX EXEMPTIONS

This field provides a window to enter any additional tax exemptions for products in this Product Class as explained in Tax Exemptions By Class, where this information can also be accessed and updated.
Class exemptions apply regardless of Site, Customer, or Division taxes.

RENTAL CLASS PARAMETERS:

COST OF GOODS SOLD

Enter the typical Expense account to be debited with the cost when rental equipment is sold, or select it from the window, searching by account number or account description.

REVENUE ACCOUNT

Enter the typical Rental Revenue account to be credited with the rental revenue, or select it from the window, searching by account number or account description.

INVENTORY ACCOUNT

Enter the typical rental inventory asset account to be debited with the purchase of new equipment, or select it from the window, searching by account number or account description.

SALE OF RENTAL ACCOUNT

Enter the typical Sales Revenue account to be credited with the revenue when rental equipment is sold, or select it from the window, searching by account number or account description. (This can be the same account as the Cost Of Goods Sold above, but generally they are different accounts.)

CROSS STORE CHECK-IN ACCOUNT

When rental products are returned to a different division than the "out" division, a portion of the revenue can be assigned to the returning division. This percentage can be setup in the Divisional Return Parameters.
Enter the Revenue Account to be credited with the portion of the rental to be allocated to the return division, or select it from the window, searching by account number or account description.

Maintenance Posting:

Optional maintenance postings can be generated to reflect a maintenance expense in the G/L as a portion of the rental revenue.

An hourly rate to be expensed for maintenance can be entered in the Maintenance Provision field for each rate code, in the expanded rate structure detail of Rental Inventory and in Groups.
If NO maintenance provision postings are required for a rate code, the field can be left blank.

When invoices for this equipment at this rate are posted in the Daily Close, a Debit is then posted to the Maintenance Expense account and a Credit is posted to the Maintenance Provision Liability account as setup in Rental Product Classes.

MAINTENANCE EXPENSE: Enter the default G/L Expense account to which to Debit the maintenance portion, for relevant products.
MAINTENANCE PROVISION: Enter the default G/L Liability account to which to Credit the maintenance portion, for relevant products.

PRICE DISCOUNT POSTING ACCOUNT

This field is only active if Post Document Discounts To G/L has been activated in the Company Posting Parameters.
When discounts are posted separately, the gross product charge is posted as a Credit to the product Revenue account and any discounted amounts are posted as Debits to the Discount Expense account.

Enter the default G/L Expense account to track discounts given through rate/price over-rides and discount percents given for products on the document.

CIRCULAR DISCOUNT POSTING ACCOUNT

Enter the default G/L Expense account to track discounts given through Circular pricing as setup in Circular Pricing.

CHARGE DAMAGE WAIVER

Check this box if products in this Product Class are eligible for Damage Waiver.
Uncheck this box if products in this Product Class should not be charged Damage Waiver.

MAINTENANCE RENTAL PERIOD

The Maintenance Schedule Report provides the flexibility to define the "# of Rental Days" (Type-1 maintenance) for non-bulk rental equipment based on the actual usage of 12 or 24 hours in each day of the rental period.

Hours rented is always determined by hours billed on each contract, but for scheduling maintenance by the number of days rented, the conversion from Hours to Days can be based on 12 or 24 hours of actual usage.

This parameter controls the maintenance schedule default that can be changed in document entry in Contracts, Reservations, Quotes, and Worksheets.
Select one of:

Select 12 Hours if maintenance schedules for non-bulk rental products is generally based on twelve hours of use in each rental day.
Select 24 Hours if maintenance schedules for non-bulk rental products is generally based on twenty-four hours of use each rental day.
Select Calendar if maintenance should be based on the full calendar hours in each day.

The Maintenance Rental Period can be captured for each non-bulk product detail on each contract to calculate when the product is due for Type 1 maintenance as defined in the Maintenance Schedule.
If there is no 12/24 value reported for the contract, the value in the Rental Product Class is used.

PRORATE SETTINGS

The process of prorating calculates the rental charge of a partial period so instead of charging the full daily rate for a partial day, or the full weekly rate for a partial week, or the full monthly rate for a partial month, it only bills for actual time out.

Note: Prorating does not apply to equipment out for less than one day.
It applies to time out past a day, and also partial days past the weekly or past the monthly period.

Window to set the prorate formula and select one of Default Settings or the Customer Alternate Settings as follows:

Default Settings
These default prorate definitions can be setup as defaults to be copied to the Product Classes.
PRORATE PARTIAL DAYS
Select one of the following partial day rate calculation options from the drop-down box, to apply after the equipment has been out for more than a day:
- Y (YES) if this product class should have the rental rates for partial days after one day, prorated.
  e.g. If equipment is out for 2 1/4 days your firm would charge 2 days plus a portion for the third day.
  This portion for the partial day rate is determined by the prompt O/T Hours In A Day as outlined below.
- H (HALF-DAY) if equipment in this product class should have the rental rates for partial days after one day, always prorated by the half day.
  The hours equal to a half day are determined by the value entered for the next prompt O/T Hours In A Day.
  
  e.g. The equipment is out for 2 days and a fraction of a day.
  If the fractional hours on the return day are less than the O/T Hours In A Day, your firm would charge 2 days plus half a day. If the fractional hours on the return day are greater than the O/T Hours In A Day, your firm would charge 3 days.
- N (NO) if this product class should NOT have the rental rates for partial days after one day, prorated.
  
  e.g. If the total hours out for the equipment equals 2 1/4 days your firm would charge 3 full days.
  This setting uses the Time Out and the Time In to calculate the exact total hours that the product was out.
  Based on a 24 hour calendar day, from Monday at Noon to Tuesday at Noon would equal 24 hours or 1 billing day.
- F (FULL-DAY) if rental products in this product class should NOT have the rental rates for partial days prorated but instead should charge the full daily rate for each partial calendar day.
  This processing uses the straight calendar date regardless of the time of the day that the product goes out or is returned.
  
  e.g. From Monday at Noon to Tuesday at Noon would equal 2 days billing because the product was out for part of 2 calendar days.
  
  Note: Any Off Rental time must be greater than the hours in a calendar day, in order to effect a reduction in the billing of equipment in a class flagged to bill Full Days.
OVERTIME HOURS IN A DAY
The value entered in this field is directly related to the Prorate Partial Days flag set for this Product Class, as follows:
When Prorate Partial Days = Y (YES):
Enter the number of overtime hours equal to a day. This applies after the first day.
The American Rental Association (ARA) suggests that the overtime number of hours per day should be six. By accepting 6, the customer will be charged 1/6 of the daily rate for each overtime hour. After six hours, the customer is charged the daily rate.
Example: An Air Compressor at $60 a day, is rented for 2 days and 3 hours.
The rental charge would be calculated as follows:
```
        (2 Days x $60) + (1/6 x $60 x 3 hours)
        =120+30
        =150
```
When Prorate Partial Days = H (HALF-DAY):
Enter the number of hours equal to half a day, after one day.
If the extra hours to be prorated are less than this, then half the daily rate is charged.
If the extra hours to be prorated exceed this, then another full day's rental is charged.

When Prorate Partial Days = N (NO):
This prompt will be ignored by the rate calculation as partial days are not prorated for this class.

When Prorate Partial Days = F (FULL-DAY):
This prompt will be ignored by the rate calculation as partial days are not prorated for this class.
OVERTIME DAYS IN A WEEK
This assigns the number of overtime days in a week. This applies after the first week.
If this field is blank, it reverts to the daily rate.
The American Rental Association (ARA) suggests that the overtime number of days per week should be five. By accepting 5, the customer will be charged 1/5 of the weekly rate for each overtime day. After five days, the customer is charged for the full week.

Example: An Air Compressor at $240 a week, is rented for a week for 1 week and 2 days.
The charge totals:
```
        (1 Week x $240) + (2 Days @ 1/5 of $240)
        = 240 + (2/5 x 240)
        = 240 + 96
        = 336
```
NOTE: If your firm charges the daily rate for each overtime day, divide the weekly rate by the daily rate to determine the number of Overtime Days In a Week to use.
If this number equals a fraction, round up or down.
OVERTIME DAYS IN A MONTH
This assigns the number of overtime days in a month (or 4 Weeks). This applies after the first month (or 4 Weeks).
If this field is blank, it reverts to the daily/weekly rate.
The American Rental Association (ARA) suggests that the overtime number of days per month should be 20. By accepting 20, the customer will be charged 1/20 of the monthly rate for each overtime day. After twenty days, the customer is charged for the full month.

Example: An Air Compressor rents at $720 for 4 Weeks, and is out for 6 weeks.
The rental charges would be calculated as:
```
        (4 Weeks @ $720) + (14 Days @ 1/20 of $720)
        = 720 + (14 Days x $36)
        = 720 + 504
        = 1224
```
WITH DAYS IN A WEEK OF

This assigns the number of overtime days in a week, when the rental is over one month (or 4 weeks). This applies after the first month (or 4 Weeks).
If this field is blank, it reverts to the daily/weekly rate.
The American Rental Association (ARA) suggests that the number of overtime days in a week after the first month should be 5.
At 5 days, the weekly rate will be charged.
Generally this prompt is set the same as O/T Days In A Week.
Customer Alternate Prorate Settings
An Alternate prorating formula can be setup company wide to apply to preferred customers as designated in Customer Information and preferred job sites designated in Customer Site Information, giving them even better rental rates.
Window to set the alternate prorate formula. For a complete explanation on how each field is used in the rate calculation refer to the prorate Default Settings above.

FINANCE INTEREST EXPENSE

This G/L account can be setup to default to new Rental Product Classes and is used by the Asset Financing Report and Posting.
Refer to Asset Financing Information for details on this feature.

RATE CALCULATION FORMULA

The standard rate calculation formula can be accessed in the window.
If a rate does NOT apply to your firm, set the formula for that rate to zero or blank.

Typical rate formula example:

        HOURLY RATE IS         .1667 TIMES THE DAILY RATE
        4 HR MIN RATE IS       .6667 TIMES THE DAILY RATE
        OVERNIGHT RATE IS      .6667 TIMES THE DAILY RATE
        WEEKEND RATE IS       1.5000 TIMES THE DAILY RATE
        WEEKLY RATE           4.0000 TIMES THE DAILY RATE
        MONTHLY RATE          3.0000 TIMES THE WEEKLY RATE

DEPRECIATION CLASS

Enter the most typical depreciation class or select it from the drop-down list, as setup in Depreciation Classes.

DEFAULT REPAIR CHARGE CODE

This Repair Charge code becomes the default code in Close Internal Work Orders when repairs are processed for Rental products in the associated class.

This code also is used by the Auto Close From Fast Track Labor process when activated in the Company Estimate and W.O. Parameters to determine which rental classes should respect this feature.

SALES CLASS PARAMETERS:

COST OF GOODS SOLD

Enter the typical Expense account to be debited with the cost when sales inventory is sold, or select it from the G/L Account Search window.

REVENUE ACCOUNT

Enter the typical Sales Revenue account to be credited with the sales revenue, or select it from the search window.

INVENTORY ACCOUNT

Enter the typical sales inventory asset account to be debited with the purchase of new inventory, or select it from the window.

WARRANTY REVENUE ACCOUNT

Enter the revenue account to be credited by use of Sales parts on a W.O., for equipment covered under a Supplier's warranty, or select it from the window.

WORK ORDER POSTING ACCOUNTS

During Work Order entry the operator is prompted for a mandatory Work Order Posting Type that is used to identify the processing path for this service transaction to control the GL accounts for W.O. posting of parts used.

Internal maintenance repairs on equipment included in Sales Inventory / Rental Inventory, and standard Work Orders, post parts used values to the standard Cost Of Goods Sold and Revenue Account defined above.
A window is provided to enter default posting accounts for parts used on equipment service Work Orders relating to the customer, as follows:

COST OF GOODS SOLD - CUSTOMER DAMAGE: Enter the Expense account to be debited with the cost of sales parts used on Work Order repairs to rented equipment caused by customer damage, or select it from the G/L Account Search window.
REVENUE ACCOUNT - CUSTOMER DAMAGE: Enter the Sales Revenue account to be credited with the revenue for the sales parts used on Work Order repairs to rented equipment caused by customer damage, or select it from the search window.
COST OF GOODS SOLD - CUSTOMER REPAIR: Enter the Expense account to be debited with the cost of sales parts used on Work Order repairs done on equipment owned by the customer, or select it from the G/L Account Search window.
REVENUE ACCOUNT - CUSTOMER REPAIR: Enter the Sales Revenue account to be credited with the revenue for the sales parts used on Work Order repairs done on equipment owned by the customer, or select it from the search window.

Note: These accounts default from the standard COGS Account and Revenue Account, unless modified.

DEFAULT REPAIR CHARGE CODE

This Repair Charge code becomes the default code in Close Internal Work Orders when repairs are processed for Sales products in the associated class.

Finished?

Click ACCEPT to proceed or CANCEL to abort.

ACTIONS:
Additional actions provided by buttons on the Product Class Defaults screen include: