There are several ways to handle Demonstration Units. The method used depends on how you want sales reported and Franchise requirements.

The simplest method is to simply tick the Demo checkbox on the Unit Sales Details screen (Items / Units). When the unit is sold it will still be classed as a New sale. You can book an internal Credit to the unit so that there is still incentive for salespersons on commission to sell it.

You can sell the New Unit to yourself and then buy it back in as a Used Unit for the same as the selling price. With this method the new sale gets counted as a new sale (all-be-it with no profit), so when looking at new unit sales balance (Opening stock + Purchases - Sales = Closing stock) the figures add up. You would normally use the ‘Internal-Sales Units’ contact record, although it will not be an internal sale. It is normally easiest to make the payment method Supplier Account (see Payment Methods) so the amount is credited to the Purchase side. The amount the new unit for is normally sold and bought is the original cost price, although you can make any price. Then Buy the Unit back in for the same price by selecting Items / Stock Items / New. Make sure you select Used Unit as the Type on the New Item screen. When the system prompts for the Contact enter the same as Sales. On the Unit details screen enter the Purchase price the same as it was sold for and make sure you change the Tax Code to Standard Rated or it will not claim the VAT/GST back. You can also tick the Demo box. Makes sure the Consignment / Floor plan box is NOT ticked. You can then go into Accounts Purchases where you should see the purchase record. If the sales payment was Supplier Account, when you go into payments you should see the Credit and then you can just allocate the Credit against the Used Unit Purchase transaction

Converting a new unit to a used Demonstrator by selling and buying back

Firstly, you need to invoice the Unit Internally.

  1. Go to Contacts and create a contact record called DEMONSTRATION UNITS.
  2. Check the details of the Unit and make a note of it's Buy and Sell prices; you'll need this information later.
  3. On the Sales screen, add the Unit details and the DEMONSTRATION UNITS contact to the sale.
  4. Click Finish.
  5. Click Internal.
  6. Select Other Internals, Tick At Cost and Save.

You then need to purchase the Unit back as a Used Unit at a Standard Rated tax rate.

  1. Go to Items, Stock Items and click New.
  2. Click Used Unit and select DEMONSTRATION UNITS as the purchase contact.
  3. Select the Unit you invoiced in the first steps.
  4. Change the Tax Rate to STD RATED.
  5. Add the buy and sell prices you noted down earlier.
  6. Tick the On Consignment box to prevent the Internal Purchase transaction being created.
  7. Tick the Demonstration box.