As you've probably probably figured out, the inventory in Sage 50 isn't designed to work the way the used car business works (but neither is anything else in this price range). The problem is that most inventory systems are designed to track only the initial purchase cost of an inventory item, but in your industry the initial purchase is just one of many costs that make of the total value of each car in inventory.

The answer for you is to use job costing. Using your example, you would set up job (Maintain menu > Job Costs > Jobs) using 12345 as the Job ID and Honda Civic and the Description. Don't worry about the rest of the fields, most of them won't be relevant, although you could set up one of the customizable fields to track the VIN.

The initial purchase, buyers fee, and repair costs, and any other related expenditures need to be posted to the inventory account (probably 12000 if using Sage 50's standard chart of accounts), not an expense account. In addition to the GL account you will enter the stock # in the Job ID field. Then you'll be able to use a job report to see everything you have invested in that vehicle. Try the Job Profitability Report, Job Ledger, and Job Register to see which one you like best.

Record the sale of each vehicle using a Sales Invoice. The $15,000 sales price would, of course, go to the sales account (probably 40000 if using Sage 50's standard chart of accounts). Make sure you have set up sales tax to calculate and record the tax. Then you'll add two more lines to move the total cost of the vehicle out of inventory and into Cost Of Sales. In this case your job report would show $11,000 in total costs. So you would add a line to the invoice for 11,000 to the inventory account and then another line for -11,000 to the Cost Of Sales account (probably 50000 if using Sage 50's standard chart of accounts). If it makes it easier for you, you could set up 3 non-stock items or service items on the inventory item list and call them something like Sales, Inventory, and Cost of Sales. Make sure the Sales Account field for each of them is set to use the accounts outlined above.

If you don't see a column for GL Account in your Sales/Invoicing window, go to the Options menu and choose Global. Then uncheck the box next to Account Receivable in the Hide General Ledger Accounts section. You'll have to close the Sales/Invoicing window for the change to take effect.

If you were planning on giving the customer the invoice from Sage 50, then obviously you wouldn't want to show the cost on it. In that case you would leave those two lines off the invoice and enter a general journal entry that credits inventory and debits cost of sales.

Thank you so much for your response and suggestions.  You have been the only person to respond and I would like to personally thank you.

I will not be using this invoice to give to the customer.  The is created in a software designed for car dealers.

Perhaps at some point Sage will be able to integrate with other programs such as Dealertrack.

You're welcome. By the way, If you are tracking all of the costs for each vehicle in Dealertrack you could skip the job costing in Sage 50. All other parts of the process would stay the same. The purpose of the job costing is just to give you an easy way to find the total amount that needs to be removed from inventory when the vehicle is sold.

I still want to collect this information in Sage to get a true picture of my P & L.  

On another note...if I collect sales tax on the vehicle, I then turn around and pay it to the state.  How do you suggest booking this sales payable account.  It becomes a wash because it comes in and goes out.

I would use Sage 50's sales tax feature. The knowledgebase article How to set up sales tax can walk you through setting it up. When you're setting up sales tax it will ask you for a GLaccount. Enter your Sales Tax Payable account (probably acct 23100). The Taxable / Exempt Sales report will tell you the amount of sales tax for each tax authority as well as the taxable and exempt sales (as if you couldn't figure that part out yourself).

When you pay the sales tax, post the payment to the Sales Tax Payable account.

Thank you!  You have been very helpful to me.

I have attempted to go back and assign Job Cost to previous vehicles.  Is this correct in Maintain Inventory?  GL Sales - 51000; GL COS 51000?

The GL Sales account will probably start with a 4 instead of a 5. Make sure that the account type (the 3rd column in the GL account drop down list) for this account is Income.

51000 is probably the right account for the GL COS.

How do I book a trade in?  We are not able to get the trade in to go back into inventory.

You can simply add the trade in as a negative line when recording the sale of the vehicle it was traded on. The GL Account for that line needs to be your inventory account, the amount should be negative (so it will reduce the amount the buyer owes), and you'll enter the stock number for the trade-in as the job# for that line.

If we enter the stock number as the job number, will that put it into my inventory for the amount that I entered?  For instance...$8,300 for a 2007 GMC 2500HD....