Depreciation is done by the inventory agent. Most stores only need to have 1 agent, however there are instances where multiple agents may be useful. An
example store is illustrated below.
Example 1: ABC Rental purchases RTO Pro 11-1-98. They receive all old inventory that they were using a manual system to depreciate with an agent name of “ABC OLD”. They do not setup “ABC OLD” for depreciation instead they plan to continue with the manual system to depreciate these items.
All items that have not began depreciating yet and all merchandise received after 11-1-98 they receive with “ABC NEW” as the agent. They set up "ABC NEW" for 3 year MACRS depreciation. They also set up 11-1-98 as the Last Depreciation Ran date. (See Agent Maintenance). Then Monthly after the first of each month they would run a depreciation report for "ABC NEW". (Depreciation reports do not have to be run monthly, you could wait until the end of the year and run all months at one time.)
Example 2: ABC Rental does a lot of retail sales and they want to be able to get retail cost of sale figures weekly. In this case they would want to have at least 2 agents, a retail agent and a rental agent. The rental agent would be setup for the type of depreciation you wish to use. The retail agent would not be setup for depreciation.
ABC Rental purchases RTO Pro 11-1-98. They receive all old inventory that they were using a manual system to depreciate with an agent name of "ABC OLD". They do not setup "ABC OLD" for depreciation instead they plan to continue with the manual system to depreciate these items.
All items that have not began depreciating yet and all merchandise received after 11-1-98 they receive with "ABC RETAIL" as the agent. They also create an agent named "ABC RENTAL" and set it up for 3 year macrs depreciation. They also set up 11-1-98 as the Last Depreciation Ran date.
Once a week, or whenever they wanted they would run a flip report. They select agent to flip from as "ABC RETAIL" and flip to "ABC RENTAL". When they run this report it shows them the inventory that was sold and gives the total cost of sale for these items. It also shows items that are flipped to "ABC RENTAL" (The items flipped to "ABC RENTAL" would be the items that were rented out so that they may begin depreciating.). Monthly they would run the depreciation report for the agent "ABC RENTAL". This report gives them the depreciation or rental cost for the month.
Agents can also be used to handle inventory that is financed or floor planned by banks, etc.
Above are only examples of how depreciation works it is generally different from store to store depending on how you wish to handle it. RTO Pro can also depreciate merchandise that you were doing manually before, however to set it up for that the merchandise must be loaded and then edited for the correct balance (cost – depreciation claimed) and depreciation began date (See Inventory Maintenance). To setup old merchandise for depreciation in the above examples you would load all old inventory that has begun depreciation as “ABC NEW” then edit the balances and begin depreciation date, then RTO Pro would depreciate all of the old inventory for you also.