3.0 How do I handle a new floorplan account?

Modified on Tue, 4 Nov at 8:58 AM

Our recommended workflow for a Floorplan account would be as follows:

To begin, we suggest creating a floorplan account within your Chart of Accounts, found under the Accounting tab of Softbase. Some prefer to use a different GL account per vendor or department, otherwise you can create one floorplan account to encompass all entries.

We recommend that this GL account be set up as a controlled liability account. The account type will be a liability, and it will need to be checked as a controlled account.

Then, once you have created an account for the floorplan, we will generally track within the journal entry application in Softbase, which is also found under the accounting tab.

To begin, you will choose the "next journal entry" option within the top toolbar and choose to add the journal with the add option in the top toolbar.

You would then debit the inventory account that is being increased with the purchase, entering the account number, the amount, and the control number. Once those values are entered, use the plus icon to add the line entry to the journal.

The next line would be to the floorplan GL account with a credit entry. You will enter the account number you have created for the floorplan, the amount (as a negative), and the control number. Then use the black plus icon to add the line to the journal.

Once the entry balances to zero, you will see the option to post the journal in the upper toolbar. Post the journal.

When you get the statement detailing your interest and principal, you will create another journal entry to account for that payment. This is often done via ACH or EFT. You will want to repeat the steps to create a new journal entry by selecting the next journal # option, and then adding the journal.

You will want to enter a line entry to debit the liability account for any principal that is being paid. You would enter the floorplan GL account, then the amount (positive), and the control number. Use the add icon to add the line to the journal.

The next line would be to account for any interest accrued and paid. This will typically be a debit to an interest expense GL account. You will enter the account number, amount (positive), and then add the line to the journal with the plus icon.

Your next line will be to credit the bank account used to make the payment. You will enter the GL account, the amount (negative), and the control number to the line and then will add the entry line.

This will repeat each time you make a payment for the life of the payments and you will make a journal entry for each payment made against the floorplan.

When you are ready to pay off the liability, you will also want to enter a journal entry using the same steps as above to create the journal. You will debit the floorplan account for the remaining balance which should bring the entries to that floorplan account to zero on that control number. You will credit the bank account for the payoff amount and add any interest expense as needed, similar to the process used in the monthly payment workflow.