EQD: How to Re-sell Services

Services such as warehousing and on-line ordering have often been included when selling items to your clients. However, in today’s age of electronically proving your audit trail, accounting for every expense becomes more critical in operating your business. This document details the workflow of reselling services to your clients.

By using this workflow you will be able to account for the services you were billed for and tie it to recovering that expense from your client.

1. Account for expense and income on your financial reports. (Proof in GL)
2. New Profit Center – sell services like you sell print!
3. Using “Recurring Invoices” expedites the invoicing process.
4. Order Entry Reports by Product Group (Proof in OE).

Services can be billed monthly, quarterly or yearly. The easiest method to follow is to match the method in which you are billed for the service. That guarantees the income and expense go to the same period. It is also possible to spread the income over multiple periods.

1. Charged Monthly – bill monthly etc.
2. Cost equals Sell – prevents affecting your sales reports with 100% profit.
3. The first invoice is created manually.
4. Subsequent invoices generate through Recurring Invoices.
5. Additional orders can be added to the recurring invoice for summary billing.

First, determine what you will be billing for, i.e. standard monthly fee or per shelf or pallet or all three.

Second, this service is more commonly billed monthly.

1. Per Month Warehouse Fee ($100)
2. Per Shelf Fee ($12)
3. Per Pallet Fee ($6)

1. Per Month On-line Ordering Service Fee
2. Determine Fee (monthly fees divided # of clients?)
3. Offer unlimited orders for a set fee ($250 per month)
4. Profit Center!

This workflow requires adding 2 GL accounts, 1 Product Group and Recurring Invoices.

Go to GL > GL File Maintenance > Chart of Accounts

1. 1. Click Add
   1. Create a Revenue account ( example 4850-0000 Online Service Income)
   2. When you save it will prompt you to add it to your financial reports – click YES
2. Click Add again
   1. Create an Expense account (example 5850-0000 Online Service Expense)
   2. When you save it will prompt you to add it to your financial reports – click YES
3. Repeat for each service you’re selling
4. Exit

Go to O/E > O/E Maintenance > Product Groups

1. Click Add
   1. Create a Product Group ID – OLS
   2. Description – On-line Services
   3. Income account will be 4850-0000
   4. Expense Account will be 5850-0000
   5. Save
2. Repeat for each service you’re selling
3. Exit

The next step is setting up the items. This can be done in item maintenance or as your creating the invoice. Create an Item for each Service. Set the item up as:

1. Item Class is Non-Stock
2. Unit of Measure is EA/1
3. Description is the service you’re reselling
4. Product Group matches the service
5. Use the same item ID for all clients to improve reporting!

Services are commonly non-commissionable. Whichever way you decide to address it, be sure to update your commission rates to account for these new product groups.

Notes about Commission

1. Cost will equal sale so no commission should be calculated.
2. If allowing the service NOT to be sold, set up commission rate to charge back at 100%

Each month an invoice will be created for the services. There is no need to create an order and because of that, you will only have invoice history for these items.

The first invoice must be entered manually. Send it to your client as your normally would. Add the item from item maintenance, add from another client or add on the fly! Best practice: create it under the Distributor Client then pull as needed.

1. Create an invoice
2. Add line item for service
3. Unit of measure = EA/1
4. Quantity = 1 (unless doing shelf and pallet charges then match a hard count)
5. Cost = Sell
6. Save, send to client (per normal procedure)
7. Post invoice to Accounts Receivable (Required in order to use Recurring Invoices)
8. Note Invoice number for setting up the recurring invoice.

Located in O/E > O/E Maintenance > Recurring Document Setup > Recurring Invoices.

1. Click ADD
2. Input the Client ID
3. Input Description – “Monthly Services”
4. Input first manual invoice number. This becomes a template for generating new invoices.
5. Months tab
   1. Select which months to generate this invoice - this is where you control monthly versus quarterly verses yearly!
   2. Set Monthly generation options in dropdown
      1. Never – the invoice can be generated once a period
      2. Allow – the invoice can be generated multiple times per period
      3. Warning – a warning window will pop open if it’s already been generated. It allows for generating again!
6. Body Notes tab
   1. Enter custom body notes for this recurring invoice. This will override any defaults.

7. Misc. tab –
   1. Clear Options – clears these fields to update
      1. Clear Ship Date
      2. Clear Client PO number
   2. Use Current – to auto update if client master record is changed.
      1. Client Address (Bill to)
      2. Ship-to Address (default ship-to)
      3. Item Information (qty, cost, sell)

8. Groups – used when using groups to generate recurring invoices

9. Subscription – N/A

10. Use Card – assign a default credit card to the invoice!

11. Save!

12. Repeat for all applicable clients

Each month, go to O/E > O/E Period End > Recurring Documents > Generate Recurring Invoices.

1. Generate Period: will default to current period, change if needed
2. Date: will default to today’s date and be the date on the invoice, change if needed.
3. Group: / Select all groups checkbox – uncheck to generate by group number(if using)
4. Check the invoices to generate
   1. See the source invoice number and the last generation date to the right.
5. Click the generate button to create the invoices
6. A window will tell you how many invoices were generated, and a log will be available.
7. Edit any invoices as needed to update shelf & pallet counts.
8. Recurring Invoices can be Auto Scheduled!!!!

This is one way to calculate how much you would need to charge each client to recover the cost of on-line ordering services. Generic values will be used as an example.

Yearly Fee = $5000

Monthly Fee – $10 per Client/ Site

# of on-line clients = 30

Monthly Fee totals = $300 x 12 months = $3600

Total Yearly Fees $8600

Divided by 12 months = $716.67

Divided by 30 clients = $23.89

By using this example, you can see how much you would have to bill your client each month in order to cover the cost of your eCommerce service.

Now let me ask you, where can your client receive on-line ordering services for under $25 per month? Answer – with you and your eCommerce program!