Managing Product Rentals

The following processes explain how to manage short-term or long-term product rentals.

Short-Term Product Rentals

This section explains how to manage stock movements, sales quotation, customer order and invoicing for short-term product rentals.

  1. Move the part that you want to rent from your stock to the Consignment stock, by following the process described in Moving Inventory Part.
    Note:
    Parts are not physically in the Consignment stock. The aim is to keep track of parts that are under a short-time rental process and create the right accounting movement into a stock under consignment.
  2. Create a sales quotation for the customer to whom you are selling the product by following the process described in Creating a Sales Quotation.
  3. In the sales quotation, add a new line defining the monthly details of the rental:
    1. In Sales Part, select L-XX-LOAN or L-XX-RENTAL depending on the type of contract (XX referring to your country).
    2. In Sales Qty, enter the number of months corresponding to the rental duration.
    3. In Price/Curr, enter the amount due per month.
    4. Select the line, then click Document Text in the Lines toolbar to add details about the sensor and guidelines in case the sensor is reported with a lost, damaged, or not returned status. The message will appear in the quotation lines.
  4. Add another line, then in Sales Part select OPENCO. This will keep the customer order open until the end of the rental.
  5. Transform the sales quotation into a customer order by following the process described in Changing a Sales Quotation into a Customer Order.
  6. On the OPENCO line, turn on the Invoice Blocked toggle so that this line does not appear in the invoice.
  7. Deliver the customer order line for the L-XX-LOAN part only, by Doing a Partial Delivery. Do not deliver the OPENCO part.
    • To invoice your customer monthly for the rental, deliver 1 quantity of rental each month and invoice it.
    • To invoice all the rental at the end, deliver all the rental quantity at the end of the process and invoice it.
  8. Create invoices link to your customer order by Creating a Full or Partial Invoice.
  9. We recommend to create a Return Material Authorization for the expected refurbished items to be returned at the end of the rental (see Creation of Return Material Authorization (RMA)). In the Return Authorization Lines:
    1. Set the Status to Planned.
    2. Set the Return Reason to LOAN.
    3. Arrival Date, enter the date specified for the end of the rental.
Then, depending on end-of-rental scenario:
  1. If the customer buys the equipment at the end of the rental, you need to update the customer order and invoice it.
    1. On your customer order, add a line with the product that is sold, then select and cancel the OPENCO line.
    2. Adjust the price according to the rental that was made.
    3. Invoice your customer order following these guidelines: Creating a Full or Partial Invoice.
  2. If the customer sends back the product after the rental, you need to choose between moving it back to your initial stock, or adding it as a refurbished product:
    1. To put back the product in your stock, move the product from the Consignment stock to your stock, by following the process described in Moving Inventory Part. The product will be considered as new.
      Note:
      Make sure to cancel the RMA you created before.
    2. To add the returned product as a refurbished part in your stock: scrap the rental part (see Scrapping a Part from the Stock), then return the refurbished product to your stock from the RMA you created before (see Returning the Product to Stock).
      Note:
      Make sure to add a note to explain why the product has been scrapped.

Long-Term Product Rentals

This section explains how to manage processes specific to long-term rentals, such as creating the sales quotation, Returned Material Authorization, fixed asset and its depreciation.

  1. Create a sales quotation for the customer to whom you are selling the product by following the process described in Creating a Sales Quotation.
Add lines to the sales quotation to define the monthly details of the rental.
  1. Create a new line:
    1. In Sales Part, select the product for long-term rental.
    2. Set the Price to 0.
    3. Recommended: Select the line, then click Document Text in the Lines toolbar to add details about the sensor and guidelines in case the sensor is reported with a lost, damaged, or not returned status. The message will appear in the quotation lines.
  2. Create a second line:
    1. In Sales Part, select L-XX-LOAN or L-XX-RENTAL depending on the type of contract (XX referring to your country).
    2. In Sales Qty, enter the number of months corresponding to the rental duration.
    3. In Price/Curr, enter the amount due per month.
    4. Optional: Select the line, then click Document Text in the Lines toolbar to add details about the sensor and guidelines in case the sensor is reported with a lost, damaged, or not returned status. The message will appear in the quotation lines.
  3. Create a third line, and in Sales Part select OPENCO. This will keep the customer order open until the end of the rental.
  4. Transform the sales quotation into a customer order by following the process described in Changing a Sales Quotation into a Customer Order.
  5. On the OPENCO line, turn on the Invoice Blocked toggle so that this line does not appear in the invoice.
  6. Deliver the customer order line and invoice for the product that is under rental only, by Doing a Partial Delivery. Do not deliver the L-XX-LOAN or OPENCO parts at this stage.
    1. Print all documents related to the product delivery.
    2. You can invoice at 0, taking into account the Document Text on this line, explaining that this is a rental.
  7. Deliver the customer order line for the L-XX-LOAN part only, by Doing a Partial Delivery. Do not deliver the OPENCO part.
    • To invoice your customer monthly for the rental, deliver 1 quantity of rental each month and invoice it.
    • To invoice all the rental at the end, deliver all the rental quantity at the end of the process and invoice it.
  8. Create invoices link to your customer order by Creating a Full or Partial Invoice.
  9. We recommend to create a Return Material Authorization for the expected refurbished items to be returned at the end of the rental. In the Return Material Authorization Lines:
    1. Set the Status to Planned.
    2. Set the Return Reason to LOAN.
    3. In Arrival Date, enter the date specified for the end of the rental.
  10. For a long-term rental, you need to create a fixed asset and apply a monthly depreciation to it. To create the fixed asset, follow this procedure: Creating a Fixed Asset.
    1. When filling the field Object Group, make sure to use the group specific to rental material. Refer to your global controller if you need guidance.
    2. Estimated Life: adjust it according to the accounting rules for depreciation (duration of the service life for your rented material). Refer to your global controller if you need guidance.
  11. Create a manual voucher to acquire the fixed asset. For this, you need to use the fixed asset account of the rented material, and add the FA code part to create a link between the manual voucher and the fixed asset. The counterpart account must be the Cost of Goods Sold (COGS) account. Refer to your global controller if you need guidance.
  12. To depreciate the value of the rented material, follow the same procedure as for other fixed asset depreciations: Managing Fixed Asset Depreciation.
Then, depending on end-of-rental scenario:
  1. If the customer buys the equipment at the end of the rental, you need to update the customer order and invoice it.
    1. On your customer order, add a line with a L-XX-OPTIONBUY Sales Part, then select and cancel the OPENCO line.
    2. Adjust the price according to the rental that was made.
    3. Invoice your customer order following these guidelines: Creating a Full or Partial Invoice.
  2. If the customer sends back the product after the rental, you need to update the RMA that you created for the refurbished items:
  3. Then, regardless of how the end-of-rental is concluded, you need to scrap the fixed asset: Scrapping a Fixed Asset from a Company.