If using Metro 2 Credit Reporting, once you repossess a customer’s merchandise, you must manually set the Metro 2 Code Settings to the account status and special comments you want to report to Metro 2.Use the Repossessions feature to
create LET (legally entitled to) documents in which you identify items in your system available for repossession,
ensure that the LET documents are valid (that is, produced within the customer's current cycle period),
create documents that allow for item substitution on the LET if agreed to by the customer,
return repossessed items back into your system,
track repossessed items within the system,
automatically re-price and re-cost the repossessed items,
prevent increases in price or cost to repossessed items above the returned value, and
upon completion, close the customer’s account to further purchases and mark it as repossessed.
Revolving Receivables must be active on your system
Accounts Receivable Control Settings - To activate the Automatic Charge-Off feature, use the Automatic Charge-Off field. Manual charge-off processing is available from the Maintain Customer Balances Routine (Bad Debt tab).
Customer Alert Code Settings - If you check the box at Automatic Charge-Off field for a selected alert code, the Automatic Charge-Off process charges off all customers to which you assign that alert code.
Customer Legal Settings - Track and report the status of repossession accounts and determine the additional steps (if any) required for repossession accounts.
Request Legally Entitled To (LET) Documents - Create LET documents for selected customers.
Warehouse/Store Location Settings (Merchandise Tab) - Specify the default storage location for repossessed items sold at selected locations.
- As-Is Status tab - Repossession Maximum $ field displays the maximum price at which you can sell a repossessed piece. Users with access via the Increase Sell Price Above Max Sell Price for Repossessions field in the Extended Security settings can override this restriction, in which case the maximum price increases to that new selling price.
- Move From As-Is tab - For products with an as-is reason code of REP (repossessed), the system prevents you from removing the as-is status from the product.
- Vendor Chargebacks tab - prevents selection of REP (repossessed) items for vendor chargebacks.
Extended Security (Sales tab)- Increase Sell Price Above Max Sell Price for Repossessions field allows selected users to exceed the repossession maximum sell price.
General Ledger Assigned Account Settings (Sales tab) - the GL accounts for repossessions are Repossession Sales and Repossession Cost of Sales.
Costing Control Settings - specify your repossessions depreciation method.
Inventory Control Settings (Misc Settings tab) - In the Reason Codes section, use the Repossessions field to specify the reason code for repossessions.
Product Group Settings - specify a depreciation percentage for repossessed items in a selected product group. It also includes a Boolean flag indicating whether the products in this group are repossessable.
Product Category Settings - specify a depreciation percentage for repossessed items in a selected product category.
Reason Code Settings - contains the default reason code (REP) that appears at the Repossessions field in the Reason Codes section of the Inventory Control Settings.
Maintain NFS Root Paths - specify the export path for LET documents.
Once you assign a reason code of REP to a product, the system assigns a status of as-is and you cannot remove the as-is status from the product.
The following order types are available for repossession:
- regular sales orders
- sales portion of exchange orders
The following order types are not available for repossession:
- Quick sales orders
- return portion of exchange orders
Warranties are available for repossession but you cannot re-sell them.
Repossessed bulk pieces are not available for resale because they do not accept an as-is status.
Repossessed non-inventory products are not available for resale because the do not constitute real inventory.
Repossessed hard kits are treated as component-only returns. That is, for repossessions, the return includes only the components and not the hard kit master.
STORIS performs depreciation by table rate for full months only. The system
calculates the number of months since the completion of the sales document by comparing the day, month, and year of the original completion date with today's date.
If
- today’s day is less than the completion day, the calculation subtracts 1 from today’s month.
- the original completion year is less than today’s year, the calculation adds the difference between the two, multiplied by 12, to today’s month.
Then, the calculation subtracts the completion month from the value of today’s month.
The following is a basic outline of the steps involved in the repossession process.
Access the Request Legally Entitled To (LET) Documents routine and create a LET document for a customer from whom you want to repossess merchandise. Once you retake possession of the merchandise, you must re-enter the items back into inventory.
Access the Process Repossessed Items screen and specify a customer. The program ensures that current LET document (that is, a document produced within the customer's current cycle period) exists for the customer before you can proceed.
If a current LET document exists, the grid populates with the items deemed eligible for repossession on the LET document. Check the boxes next to the items in the grid you have repossessed, then click on Save. The Original Document Select (Repossessions) screen appears.
On the Original Document Select (Repossessions) screen, you can update information on selected items. You can also access the Waived Item Select screen in which you can access a list of other items purchased by the selected customer. You can then select one or more of these items for inclusion in the return. You can also use this screen to override the default settings for the return storage location, and/or enter the identifying piece reference number for serial-tracked special-order pieces.
When you finish specifying the items for return, click the Save button on the Process Repossessed Items screen. The program
creates the return documents and groups them in a single return for each original invoice,
flags the return as a repossession, and
completes the return.
The completion of the return includes several updates. The system:
calculates the returned cost value and the selling price value of the items and uses these two calculated values to make offsetting general ledger postings included in the normal posting generated for a customer return.
adds the items to the as-is inventory of the store to which they were returned with a price equal to the calculated selling value and a cost equal to the calculated returned cost.
flags the items as “Repossessed” and tracks them until sold, capping the selling price at the calculated return selling value.
credits the calculated selling price of the returned items to the customer’s Revolving balance up to the open amount.
updates the invoice item adjustment history field on the original completed order to indicate that the items have been repossessed and that no further adjustments can be made on those items.
appends an exclamation mark (!) to the reference number used in Revolving Receivables, identifying the receivable as repossessed.
flags the customer’s account as repossessed. Based on the legal settings in the Accounts Receivables Control Settings, other updates may occur.
If using Metro 2 Credit Reporting, once you repossess a customer’s merchandise, you must manually set the Metro 2 Code Settings to the account status and special comments you want to report to Metro 2.
When applying credits to the customer’s receivables, the system applies the maximum amount possible to open Revolving plans. If the customer has multiple Revolving plans, then all plans with an open balance are available for posting of credits. If the repossession includes multiple completed orders, you can post the credits earned from the repossession of items in any one of the completed orders to any one or more of the customer’s plans with an open balance. The order of preference is
post credits earned on completed orders to plans used to finance that completed order, using first any plans used for deposits and next the plan used for financing.
If these plans do not exhaust the credits earned on that completed order, then post to any other plans used on any other completed orders in the repossession up to their open balance.
If these plans do not exhaust the credits earned, then post to any other plans not used on any completed orders involved in the repossession up to their open balance.
If these plans do not exhaust the credits earned on that completed order, then post to the master plan up to its open balance and post any remaining credits to Open Item.
The system adds returned items into the STORIS inventory files using the same process used for regular customer returns. The system calculates the selling value and return cost value based your selection on the General tab in the Costing Control Settings - either a depreciation table or the prorated method.
a depreciated value, including sales tax, based upon a monthly depreciation table - This percentage is controlled by product category and product group where the group is referenced for a percentage first. If no percentage exists at the product group level, then the product category is checked. If no value exists at the product category level, then the global setting is checked. Once the monthly depreciation amount is calculated (by multiplying this rate time the selling price), that monthly amount is multiplied by the number of months since the original sale date to determine the total depreciation amount.
a prorated value based upon the total retail value, including sales tax, compared to the total remaining balance due if the value of the goods is greater than the remaining balance due.
The selling price and returned cost are reduced from their original values by the same percentage.
For each returned item, the sell price updates with the calculated (depreciated) selling value. The Costing Table updates with the calculated (depreciated) costs. The system flags the pieces as repossessed and records their maximum selling prices. You can change the price of these pieces but only authorized users (via the Increase Sell Price Above Max Sell Price for Repossessions field on the Sales tab in the Extended Security settings) can exceed the maximum selling price. You can change the cost of the pieces using the Update a Product Cost routine. Dictionaries are available in the Report Builder to provide access to these fields.
To sell a repossessed piece, you must first identify the piece as "as-is" (via the Merchandise tab of order entry) and then enter the reference number of the piece. If you attempt to override the default price with a price that exceeds the repossession maximum (displayed at the Repossession Maximum $ field on the As-Is Status field in the Stock Adjustments routine), an error message appears and the previous price reinstates.