REGARDING PAINT MATERIALS HOW TO POST AND HOW THE ACCOUNTING WORKS

CC3 handles paint materials from a jobcosting and general ledger perspective in this way >>> 1. When paint materials are bought, they are recorded as inventory (Debit to Paint Material Inventory). 2. Paint materials are expensed when the RO is Closed accoridng to the Paint Material expense calculation (Credit to Paint Material, Debit to Paint Material Cost of Goods Sold).

Specifically an asset account # in general ledger for Paint Material expense – like account # 140 “Paint Material Inventory” as an example. To setup an account # in CC3 from the Main Menu > General Ledger > Setup Accts . Once that account is setup, from the Main Menu > Setup/Edit List > Setup Accounting you will see in the center of that screen a “Paint Material Inventory” account #, in our example here that should be “140”.

To record the purchase of Paint Materials >>> From Main Menu > Post Transactions > Enter the vendor, invoice #, and amount, and enter the account # for Paint Materials for Debit (140 in our example here), and for Credit enter the account number for Accounts Payable (typically 260).

The Paint Material expense calculation percentage is set from Main Menu > Setup/Edit List > Setup Shop in the middle of the screen “Paint Material Cost”. Typical shop will set this at about 75% – which means – “My cost on paint material is 75%.”

When closing any given RO, you will see in the F6-CLOSE screen of the RO in the middle of the screen a paint material expense amount that is a result of the Paint Material calculation mentioned in previous paragraph. When the RO is actually closed, an entry will automatically be created for this RO recording that as the paint material expense, as part of the group of closeout entries entered into the Journal for that RO. Specifically that will create a Debit to Cost of Goods Sold (COGS) Paint Materials, and a Credit to the Paint Material Inventory account mentioned above.

All this said over again in a different way >>> You buy paint materials, a guy walks in with a can of paint, and puts the can of paint on the shelf >>> translation >>> placing paint into inventory >>> further translation >>> Debit Paint Material Inventory. When the RO Closes the paint material is taken out of inventory >>> translation >>> Credit Paint Material Inventory.

That said – how will we reconcile the Paint Material Inventory account so that the amount of Paint Material Inventory in my system equals what is on my shelf ??? We must set the Paint Material inventory amount for the account (140) at some point in time, and probably working with your paint material jobber who will come in and take inventory of your Paint Material and tell you it’s value. Let’s say that value is “$20,000”, contact tech support on how exactly you use journal entries to set the amount in CC3 for a given account like paint material. Let’s say 3 months later, which is a good amount of time, your Paint Material Inventory account on your balance sheet says “$32,000” – and you Paint Jobber who does another inventory says your value on the shelf is “$28,000” – a $4000 discrepancy – what does this mean ??? It means 1 of 2 things that #1 your paint material cost percentage set in Setup Shop above is set too low, or #2 that someone is stealing paint materials. Assuming you are confident you are not being ripped off, then you are using more that 75% that you set previously, and you need to reset it to say 80%. So you do that, and like earlier in this paragraph you reset the value with journal entries to “$28000”. About a month from now you repeat the expercise with your paint jobber. This is who you can very closely track your paint material inventory using CC3.