Understanding the Vehicle Sales Accounting Journey in Navigator

When a vehicle is purchased and sold through Navigator, its value moves through several accounts before the final profit appears in your Profit and Loss.

This guide explains how a vehicle moves through Vehicle Stock, Sales Suspense, Vehicle Debtors and Cost of Sales, and how to check each stage.

1. How the Accounting Journey Works

A typical vehicle sale follows this process:

Vehicle Purchased → Vehicle Stock → Vehicle Invoiced → Sales Suspense & Vehicle Debtors → Customer Pays → Vehicle Debtors Cleared → Deal Closed → Profit & Loss Updated

Until the vehicle deal is closed, the purchase cost and sale value are generally held on the Balance Sheet rather than being recognised as sales and costs in the Profit and Loss.

2. Stage One – Purchasing the Vehicle

When a vehicle is purchased from a manufacturer or supplier, its purchase invoice is posted against the vehicle stock record.

Navigator records the following accounting entries:

This increases the value of vehicle stock on the Balance Sheet and records the amount owed to the supplier.

Example: A vehicle is purchased for £20,000 excluding VAT.

The £20,000 is recorded in Vehicle Stock. It does not immediately appear as a cost in the Profit and Loss because the vehicle has not yet been sold and the deal closed.

Where to check:

Navigate to Vehicles > Vehicle Admin Toolkit > Reports > Stock List to review vehicles held in stock.

3. Stage Two – Invoicing the Vehicle Sale

When the vehicle is sold and the sales invoice is raised, Navigator records the sale against the vehicle deal.

Example: The vehicle is sold for £25,000 excluding VAT.

The sale value is recorded in Sales Suspense, and the amount owed by the customer is recorded against Vehicle Debtors.

At this stage, the sale has not yet been transferred to the Profit and Loss.

This is because the vehicle deal remains open.

Where to check:

Navigate to Vehicles > Sales Manager's Toolkit > Reports > Pipeline Profit Report.

This report helps identify invoiced vehicle deals that have not yet been closed.

4. Stage Three – Receiving Customer Payments

As the customer pays for the vehicle, receipts are recorded against the vehicle deal.

Each payment reduces the outstanding balance owed by the customer.

Once the full payment has been received and allocated, the vehicle's outstanding debtor balance should be cleared.

Where to check:

Navigate to Vehicles > Sales Manager's Toolkit > Reports > Debtors List.

Important: Vehicle Debtors are generally separate from the standard Sales Ledger Debtors used for workshop and parts credit customers.

5. Stage Four – Allocating Preparation and Additional Costs

Before closing a vehicle deal, any applicable costs must be correctly assigned to the vehicle.

These could include:

• Pre-delivery inspections (PDI)

• Workshop preparation

• Servicing or repairs

• Accessories or additional equipment

When the workshop invoices the sales department for work carried out on a vehicle, the costs may need to be allocated to the vehicle stock record.

How to check unassigned costs:

1. Navigate to Vehicles > Vehicle Admin Toolkit.

2. Select Reports > Action Report.

3. Run the report and check for unassigned costs.

4. Open the relevant vehicle stock record.

5. Select the Preparation tab.

6. Use Assign Costs to allocate the appropriate costs to the vehicle.

Unassigned costs can prevent a deal from being closed or result in inaccurate vehicle profit figures.

6. Stage Five – Closing the Vehicle Deal

Once the sale has been completed and all relevant costs have been assigned, the vehicle deal can be closed.

This is when Navigator transfers the sale and costs from the Balance Sheet to the Profit and Loss.

The following accounting entries take place:

This removes the vehicle's cost from stock, clears the sale from Sales Suspense and recognises the sale and its associated costs in the Profit and Loss.

Example – How the Profit Is Calculated

Using our example vehicle:

These figures are illustrative, exclude VAT and assume no other costs or income.

Before the deal is closed, the sale and costs remain in the relevant Balance Sheet accounts.

Once the deal is closed, the sale and associated costs are recognised in the Profit and Loss.

Where to check:

Navigate to Vehicles > Sales Manager's Toolkit > Reports > Profit Report.

This report displays the profit on closed vehicle deals.

7. How to Check Everything Has Been Accounted For

Navigator provides several reports to help you check that vehicle transactions are correctly recorded.

Checking Sales Suspense at Month End

Once the relevant vehicle deals have been closed, they should no longer retain balances in Sales Suspense.

You can investigate this using the Schedule Nominal Report within the Nominal Ledger.

1. Open Nominal Ledger > Reports > Schedule Nominal Report.

2. Enter the relevant Sales Suspense nominal code.

3. Select Stock Number under Schedule By.

4. Choose the appropriate reporting date.

5. Click Report.

6. Review any balances against vehicle deals that have already been closed.

An open deal can legitimately have a Sales Suspense balance. However, a closed deal retaining a balance should be investigated.

If you find an unexplained balance, contact the Helpdesk with the relevant stock number and reporting details.

Summary

The key point to remember is that invoicing a vehicle does not automatically mean its profit has been recognised in the Profit and Loss.

The purchase cost is initially held in Vehicle Stock, while the invoiced sale is held in Sales Suspense. Customer receipts reduce Vehicle Debtors, and preparation costs must be correctly allocated.

Once the deal is closed, Navigator transfers the sale and costs into the appropriate Profit and Loss accounts.

Regularly reviewing the Pipeline Profit Report, Action Report and Sales Suspense balances helps ensure your management accounts accurately reflect completed vehicle sales.

Related Guide: Understanding the Difference Between the Profit Report and Pipeline Profit Report.