scanTag is a new feature that was added to Lizzy about a month ago that allows a Service Tech or Manager to quickly create service tickets on the fly.  The general idea is to be able to scan a VIN or Barcode label and have Lizzy automatically locate the customer and unit, and create the service ticket for you with one click.  If this sounds interesting, wait until you see what it runs on!

Lizzy’s new scanTag system was designed to operate on an iPad, iPhone, Droid Phone or Droid Tablet, so the applications and what we plan to do with it are endless!  So here is the flow:

When a unit is sold or serviced, a small barcode label is attached and assigned to that unit.  This can be done directly from the service ticket you’re working on or the new unit purchase screen.  Once registered, Lizzy will be able to quickly identify the unit simply by scanning the tag.  These labels can be purchased directly from nizeX, Incorporated or can be any standard barcode label that is durable enough to last outdoors.

Later:

A customer arrives at your shop for service.  You pickup your iPad and Scanner and walk outside with them.  You select the New Service Ticket menu on your device and scan the barcode located on the unit.  Lizzy then identifies the unit and the customer, and presents you with a verification box that shows both.  You verify with a simply touch on the screen and Lizzy creates the service ticket for that customer, attaches the unit to it for service and places you on the Jobs screen to create the job that needs to be done.

It can’t be any easier than that.  No more search for customer records, trying to find the customers unit or anything in between.  One scan and you’re ready to go.  Another nice feature of Lizzy is the ability to run the complete package on the iPad. This enables you to continue collecting all of the necessary job requirements on the iPad or you can walk back inside and finish up the ticket on a computer there.

Lizzy, where imagination is your only limit.

Lizzy will report these intelligently, if you tell her you need them.  How do you do this?  In the Sales Tax setup of course!  If we go there ( Settings > General > Tax Rates ), you’ll notice in the upper section ( 3rd Column ) that there is ‘This is an exempt tax’ flag.  This flag allows us to create multiple ‘Exempt’ statuses within Lizzy, for just such a thing as reporting Wholesale vs. Farming vs. Out of State vs. whatever.

Then, when you use one of these taxes on an invoice – Lizzy will be able to distinguish it from just Exempt, which is exactly what you need when filling out your Tax Report.

But I digress…

When you are told to adjust Equity, you are being told to do that for 1 reason, and 1 reason only.  To enter/adjust your starting figures into Lizzy.  We understand that the vast majority of our clients are coming from another system to Lizzy.  Lizzy understands this as well, and as part of her functionality, has 2 items to note for inventory.  Both are in Settings > General > Company Info.  The first is “Date We Started Using Lizzy”.  This is your ‘Go Live’ date, and the date Lizzy uses for her internal adjustments.  The other is the “Initial Inventory is Complete” check box.  While this check box is unchecked, any inventory adjustments you make Lizzy assumes to be part of the inventory loading process, and adjust for the day prior to your “Go Live” date.  Once your final inventory adjustments are done, you check the Complete check box, and then Lizzy makes inventory adjustments for the day you do them.

However, this causes an oddity to your Profit / Loss Statement, and that is that Inventory Shrinkage all of a sudden has hundreds of thousands of dollars ( or more ) as balances, which of course is wrong.  Those figures need to be adjusted.  And at the same time, so do all of your other figures from your Balance Sheet, and Profit / Loss system up through your Live date.  How do these beginning numbers get into the system?  Through GL Adjustments offsetting ‘Equity’.  I’ll now pause for the exclamatory screams from all of the CPAs.

But wait, and think for just a moment.  What is Owner’s Equity/Retained Earnings account for?  It is fluctuation of all of your Business Activity for a given year.  Well, what are you doing?  You are making the biggest fluctuation you ever make by changing your business system to Lizzy.  So, in a way, it makes sense to adjust your OE/RE account as we enter our values.

But the other aspect is that because you are using a business system, you have to make adjustments separately to get values into the system.  Lizzy prevents you from adjusting her protected accounts ( Inventory, Receivables, Payables, Checking, etc ) directly from the General Ledger, as by doing so would create an imbalance between the GL and each specific subledger.  As an example, Lizzy tracks Inventory by each and every part that you tell her about.  So, if your GL says you have $100000 in item inventory, Lizzy doesn’t see $100000 as a single value, she see’s it as thousands of parts with varying values that sum up to $100000.  But, if you make a GL Adjustment to Inventory, how is Lizzy supposed to account for it.  She still see’s the same thousands of parts the sum up to $100000.  The same holds true for all of her protected accounts.  That’s why she won’t let you adjust these accounts in the GL.  You need to tell her specifically what parts are no longer there, otherwise she has to assume they are still there and have value, because, to her, she can prove they are still there being counted.

So, to enter the initial values on these accounts, you need to do so separately from the GL Adjustment form.  So, for your Accounts Payables, you go enter Expense POs offsetting OE/RE.  For checking, you enter a beginning balance, offsetting OE/RE.  Same with receivables, you enter each customers balance, offsetting OE/RE.  Inventory, because inventory adjustments are a regular part of business activity, offset Inventory Shrinkage.  So you’ll need to adjust Inventory Shrinkage into OE/RE.

However, once all of your protected accounts are entered this way, you have all of your other assets, liabilities, and equity balances you need to enter, plus the income, costs, and expense accounts since the beginning of your fiscal year.  I always suggest when doing so you do each section separately, to make it simpler to track any mistakes that could be made.  So you’d enter all your Other Current Assets as a GL Adjustment, offsetting OE/RE.  Then your fixed assets, and so on and so forth.  Naturally, you would date everything for the day before your Go Live date.  When you get to your P&L items, I always suggest breaking those down by month ( so if you started Lizzy on May 15th, as an example, I would enter my P&L items by month.  So I would enter Jan Income, offsetting OE/RE.  Then Jan Costs, then Jan Expenses.  These I would date for the last day of the month ( Jan 31, Feb 28/29, Mar 31, etc ).  By doing these this way, I can run P&Ls for the month for these months, and use them for comparisons for next year and future years.  Then, when I got to May, I would do the same thing for May 1-14, and date it the 14th.

Once you’ve done all that, and if you did it correctly, your Trial Balance/Balance Sheet from your old system should match Lizzy as of the day before your Go Live Date.  INCLUDING your OE/RE account.

Now – there will be occasions where this doesn’t balance.  This is because those protected accounts don’t match up.  Meaning your Trial Balance in your old system will be $110K, but Lizzy says $100K ( because those are the parts you told her about ).  Now at this point, either there are $10K worth of parts missing that didn’t get entered, or your old system’s Balance Sheet was wrong ( which I find more and more to be the case, simply because of how your old system tracked parts, or allowed you to make adjustments to these accounts that weren’t really right ).  To fix the protected accounts, you basically make a non-protected account similar  to the other accounts for conversion adjustments.  So, for our example, I would create an Inventory account named “Lizzy Conversion Adjustments” and put my missing 10K in there, offsetting it to OE/RE ( which should also be short 10K ).  Point being, if your Balance Sheet/Trial Balance balances in your old system, you should eventually be able to get it to balance in Lizzy for your Go Live date, based on these adjustments.

And that is what we mean by adjusting your OE/RE accounts.

( For the record – at no other time, and for no other reason – do we recommend making manual adjustments to OE/RE. )

First – why Accrual Basis?

Well – lets define for us cash-basis vs. accrual-basis accounting.  Cash basis is where income is not counted until cash (or a check) is actually received, and expenses are not counted until they are actually paid.  Accrual basis is where transactions are counted when the order is made, the item is delivered, or the services occur, regardless of when the money for them (receivables) is actually received or paid.

GAAP ( Generally Accepted Accounting Principles ) state that you MUST use an accrual basis accounting method if a) your business has sales of more than $5 million per year, or b) your business stocks an inventory of items that you will sell to the public and your gross receipts are over $1 million per year.  As most of our dealerships have no problem meeting this second criteria, we use accrual basis.

However, it has been brought up, why do we not have transactions take place when you complete a repair order, or when you complete a job on an invoice?  Good questions.  In simplistic terms, to make things cleaner, Lizzy only considers it a transaction when you cashier the invoice.  Lizzy handles it this way because we, the user, are human beings, and we make mistakes, and un-complete jobs to make changes or add parts, and frequently do so multiple times.  We also edit complete invoices that haven’t been cashiered, also adding parts or miscellaneous items to them.  To refrain from seeing hundreds of GL transactions for an invoice, because we’ve completed a job, then uncompleted it, made changes, completed it, uncompleted it, made more changes, etc… Lizzy keeps all this at bay by considering it a transaction at the time of cashiering – even if you don’t pay right now ( by putting it on account receivables ).

With this minor exception – Lizzy handles all other accounting processes via the accrual basis method.

If you want to see “Cash basis”, there are several articles you can find via Google that will explain how you can look at your accrual system as if it were cash basis ( involving removing receivables from income, and payables from expenses ).

Each hour there are a couple different sessions going on that cover topics from how to better run your shop, to getting the word out through Facebook and twitter. The dealers that I’ve spoken to seem very happy with the content of the show and I have had the chance to sit in on a couple of the classes and found them very informative.

Overall we have had a very successful showing, but I hope that next year more of you guys find your way here. It is well worth the time and money to learn better ways to do things and how to improve your bottom line. Fresh looks at how to do the same day to day business, but sell more parts and make customers happier to insure they return to do more business with sooner rather than later, are things you could all use.

We attend a lot of shows and dealer meetings throughout the year and I have to commend the people at Powersports Business for putting on a very professional show and providing a lot of useful and relevant information to the attending dealers. They have also gone out of their way to make all the vendors feel at home and part of the process so we thank them for that as well.

We have enjoyed the show and are sure we’ll be attending next year and expect more of you guys to come join us.

From Vegas