We had a demo session with a fastest growing car dealing and auction broker in Lagos last week to discuss the scope of QuickBooks software implementation and how they could effectively monitor their cash flow on a real time.
During our conversation, the panel of managers was concerned about tracking foreign currency transactions; their model is in such a way that car buyers prefer to pay in Naira while they, as a licenced car auction broker, bid on various car brands online, handles all landing cost and settle the bills in US dollars.
Businesses like this requires an affective foreign currency translation processes and real time exchange rate update in order to get their books of account right.
Request For Our Accounting Software ServiceFor over 5 years, we have implemented QuickBooks for several companies under Retail, Manufacturing, Oil & Gas, Real Estate & Construction, Travels, Hospitality,Legal, Co-operatives, NGOs, Financial & Service Sectors.
- Mbaire Services Nigeria Ltd(Construction)
- Chisco Transport Limited(Transport)
- Aristokrat 360 Limited(Creative & Media Agency)
- Alpha Pharmacy (Health Care & Supermarket)
- Hawkes Legal(Legal)
- OPI Nigeria International Limited (Oil & Gas Servicing)
- Zenilum Company Limited (Oil & Gas Servicing)
- Lilygate Hotel(Hospitality)
- Josien Holdings Limited(Distribution)
- Aisha Buhari Foundation (Futured Assured)(NGO)
- Doheney HR Services(HR)
- Biddel Oil & Gas Limited (Oil & Gas)
- System Intelligenz Limited(Contractor)
- MagTech Information Security (IT)
- Infusion Cakes Nigeria (Bakery)
- Landmark Centre (Event Centre)
- Mountain Ice Travel & Tour (Travels)
- BTS System (Service)
- Logos Travel Support & Solutions Ltd (Travels)
- Germaine Auto Centre (Autos)
- BD Consult (PR)
- Starlight Nigeria (Retail)
- Temple Private School (Education)
- C. Charles Resources Limited (IT consulting)
- Adeniyi Coker Consultants Limited (Real estate and construction)
- The Nigerian Economic Summit Group (NGO)
- Value Mart Supermarket (Retail)
- Transweb Bureau De Change (Financial Service)
- Wakanow Travels (Travels)
- Vektro Food Limited (Manufacturing & Retails)
- Orient Petroleum PLC (Oil & Gas)
- Plus More
How then could QuickBooks solve their financial management challenge, a key personnel ask?
To answer the questions, we will divide their business transactions into four (4) key parts:
- Domiciliary account setup and exchange rate update.
- Creating a foreign seller account and bills to track all payables in USD, including shipping fee.
- Creating another service provider account to track custom duties on the car imported.
- Invoicing the customer in Naira to record receivables and receiving payment into a Naira bank account.
Domiciliary account setup and exchange rate update.
We have already shared a complete guide to adding your domiciliary bank accounts in QuickBooks and updating your foreign exchange rates in one of our previous posts, click here to learn more
Creating a foreign seller account and bills to track all payables in USD, including shipping fee.
If you had read through the guide above, the rest shouldn’t be a challenge; go to the “Supplier or Vendor Centre” and create a foreign supplier which, in this example, is the car auction seller or company based in the USA.
- At the top left, click on “Add new”.
- Fill in the sellers’ details > Enter an outstanding balance payable to the seller > Select the currency you would be paying when settling the car auction price.
- Click on “Save”.
After creating a supplier’s account, you can now proceed to add a “bill” or “write a check” to track all USD payables or payment respectively to the total foreign transaction cost of the car, including shipping and freight charges. The “bill” is used for auctions that are yet to be paid for but is already won while the “write a check” window tracks upfront payment on auctions.
Creating another service provider account to track custom duties on the car imported.
By law, every importer is required to pay a customs duty on cars imported which is determined by the estimated value of the car. Such tax payable in Naira would also be tracked via the “write a check” window, mapped to “Custom Account” under suppliers name with the relevant bank payment account selected.
Invoicing the customer in Naira to record receivables and receiving payment into a Naira bank account.
You can also use “Create Invoice” to record the car details, amount charged, and VAT deductions receivable from customers. This will help you create a “Customer Receivable Account” that checks your expected cash inflow.
From our conversation, we also understood that they always request for an upfront payment on car orders before, proceeding to big for cars and upon delivery to the customer, the final payment is received.
To record such transaction, we advised that they use “Customer Payment” window to receive upfront payments and select “Record Deposit” to pay into the account such fund is domiciled.
For Car Dealers
If your line of auto business is in buying, keeping inventories and selling cars to targeted client, you would have enter all the details about the cars you sell, quantity on hand, cost price (shipping fee inclusive) and sales price using the “Item List” window.
Following the guide shared here will no doubt put your books in place without financial management challenge, you will easily generate a profit or loss account, statement of financial position, cash flow, receivable report, VAT liability report, etc at ease.
For demo on how we can set your car auction brokerage business up in real time, you can connect with our client support service at firstname.lastname@example.org or call 08105090001.
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