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Level 1

How to track warranty-related repair or replacement.

We sells products that have 90 days warranty.  If a customer contacts us during this 90-day period about an issue, the process is as follow:  

  1. customer send the item to us (customer pays for shipping)
  2. we troubleshoot
  • If after troubleshooting we determine the issue is due to our fault, then we would either fix or replace free of charge.  
  • If we determine the issue is due to the customer, then customer is charged the time and material to do the repair.
  • we ship the item back to the customer (we pay for the shipping)
  • Here is what I do to record the above transaction:  Create a "warranty invoice" to send to customer.

    1. If due to our fault, then:
    • Repair:  Account Type = Warranty_Repair and Cost = $0
    • Replace:  Account Type = Warranty_Replace and Cost = $0
    • Record an entry under UPS account for the shipping (we pay).  This becomes an expense for us.
  • If due to customer's fault, then:
    • Repair:  Account Type = Warranty_Repair and Cost = $X.XX
    • Replace:  Account Type = Warranty_Repair and Cost = $X.XX
    • Customer would be invoiced for the repair or replacement, along with shipping. 

    Is what I wrote above correct?  Also, 

    • How to do I record the replacement since it decreases the inventory?
    • Also I go back to our vendor, if they replace the bad part and send me a new one, then I would add that back to inventory?

    TIA!

    Solved
    Best answer December 10, 2018

    Best Answers
    Level 15

    How to track warranty-related repair or replacement.

    No charge repair or replacement
    create a sales receipt, list the inventory items used and set the sale prices of each to zero.  Click in the sales receipt number box and add a -W (for warranty work) to the receipt number, save.  Enter the payment for shipping using a shipping expense account as you usually would.  If you want, set a class for shipping-warranty and tag the transaction.  I do this so I can report on warranty shipping expense and control those costs somewhat.


    You will charge for the repair or replacement
    same as above, but enter the sales prices of the items used out of inventory, use a service item for any labor charge, and a shipping item for the pre-paid shipping.  Whether you track this with a class is up to you

    View solution in original post

    2 Comments
    Level 15

    How to track warranty-related repair or replacement.

    No charge repair or replacement
    create a sales receipt, list the inventory items used and set the sale prices of each to zero.  Click in the sales receipt number box and add a -W (for warranty work) to the receipt number, save.  Enter the payment for shipping using a shipping expense account as you usually would.  If you want, set a class for shipping-warranty and tag the transaction.  I do this so I can report on warranty shipping expense and control those costs somewhat.


    You will charge for the repair or replacement
    same as above, but enter the sales prices of the items used out of inventory, use a service item for any labor charge, and a shipping item for the pre-paid shipping.  Whether you track this with a class is up to you

    View solution in original post

    Level 1

    How to track warranty-related repair or replacement.

    Why can't I put a $0 in the price box.? This registers the "sale" replacement of the warrantied item  in inventory and does not charge the customer.
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