Customer Trade-ins

If you have a business that accepts trade-ins, you can keep an accurate record of sales with trade-ins. You can create a special item called 'Trade-in' that will lower the amount due from the customer. You should also then create a special detail checking account to purchase the trade-in.

Example: you sell a piano to a customer for $2,000.00 and accept a trade-in of the customer's current piano for $500.00. The customer's balance will be $2,000.00 minus the $500.00 trade-in amount. You purchase the trade-in piano, and it then becomes part of your inventory.

Here's how:

1. Create a customer card for the customer. Also create a vendor card with the same name or create a special vendor card for all of your trade-in purchases. (Example: 'Trade-In')
   
2. Create a new detail checking account just for trade-ins. Select the Accounts Command Center and open the Accounts List. Go to the Assets tab and select New at the bottom. In the Edit Accounts window, choose Detail Checking Account (Postable). Enter a name and number for the new account then select OK.
   
3. Now, go to the Inventory Command Center and select the Items List. Select New at the bottom and create a new item that you can use with trade-in transactions to reduce the amount of the sale. Set up this special item as 'I Sell' only and choose the new detail checking account created in Step 2 as the Income Account for Tracking Sales. Note: Disregard the warning "The account for tracking sales is usually an income account.". Don't forget to create an item for the actual trade-in item that will be entered into inventory.
   
4. Enter the sales information for the item being sold. Then enter the special trade-in item set up to reduce the amount of the sale. Note: Be sure to enter the amount in the Total field for the trade-in item as a negative number, then click Record.
   
5. Enter the purchase information for the actual trade-in item that will be entered into inventory. Enter the amount in the Total field as a positive amount. Click Record.
   
6. Open the Pay Bills window within the Purchases Command Center. Use the pull-down menu in the left corner to choose the special checking account created in Step 2. Apply the "payment" to the open purchase.

The result in our example is the customer's invoice is reduced to $1,500.00. The $500.00 purchase of the trade-in item is fully paid and the item has been entered into inventory.

Note: Since the same amount is recorded to the special checking account as a vendor payment (credit) and as a customer trade-in (debit), the special checking account will always have a zero balance.