Much to the relief of CFO’s and Rental Managers alike, Shepherd’s rental module in NetSuite uses the equipment record. This is the same record that Shepherd’s subscribers also log maintenance and servicing. Renting and servicing that same equipment record allows Shepherd to report on its entire profitability, which includes rental revenue as well as service cost and service revenue. Many Shepherd subscribers also choose to represent their rental equipment as fixed assets using the NetSuite Fixed Asset Module. Doing so, of course, allows for automatic capitalization and, later, the calculation of depreciation, residual value, etc.
Rentals: an asset like any other
An important distinction to make is between the rental asset and the inventory item. Often Shepherd subscribers will purchase their rental assets as inventory items within NetSuite. This often happens before implementing Shepherd and many of those subscribers report that they used home-made or even third-party solutions that allowed them to ‘rent’ their inventory items. Though such solutions might have worked to a limited degree, ultimately they fail. Rental assets are just that: assets. It is not correct to carry them in an inventory account categorized as other current assets on the balance sheet.
Shepherd’s infleeting processing acts on the inventory adjustment, item receipt, and item fulfillment. In all three transactions this process costs and, therefore, eliminates the inventory item. It then represents that same inventory item as a rental machine whose details we determine within that item’s configuration. For customers who have implemented NetSuite Fixed Assets, Shepherd will also represent that inventory item as a fixed asset whose value equals that of the infleeted inventory item.
Keep track of every item, big and small
When modeling one’s rental assets, there is one exception to this capitalization process: the treatment of rental accessories. Often rental companies will offer cables, gauges, or other accessories as add-ons when making a rental. Likely you have a rented car whose rental agents offered to include a GPS device at an additional daily cost. How often do you think that those little devices go missing?
In such cases Shepherd does allow for the inclusion of accessories represented as inventory items on its rental contracts. The user may choose to charge an additional rental fee for such items. Upon rental return, Shepherd reminds the rental agents to verify the return of these rental accessories as well. Missing accessories then find their way to the sales order, automatically eliminating their frequent and unaccounted-for loss.
These often small but significant features are part of what makes using Shepherd so beneficial to those who sign up. Learn more about how Shepherd can improve your operations by speaking to your regional sales manager.
Equipment Rental
Best option using NetSuite
