As always Best Practices are ideas we put in front of you to help you come up with a solution that works for your business. Here are how several dealers handle Loaner equipment.
Dealer One: I treat loaners just like a rental piece of equipment except no charges are involved. Attach the machine to the customer. Change its status to on loan.
Setup a contract using a loaner contract bill code. (See more on the contract portion in the second half of this post)
Now you can see where the machine is, when it was delivered, how many copies they ran it, etc. You don’t need to use a loaner warehouse but that's purely up to you. If it makes it easier, then instead of changing the status of the equipment, transfer it to the loaner warehouse.
Dealer Two Comments: We do the same, which keeps things simple. We change the status of the machine to On Loan, set the equipment at the loaned customer, and check the install date as the date the loaner was taken. If it is a short term we stop there. If it is long term for a machine problem, we add the loaner to the customer's contract and add it to the meter groups. That way we still get meter clicks from the customer. When the loaner comes back in, we set the end date for it in the contract and enter the final reading.
Something else to add. Doing it this way give us a really quick way to go to the equipment list and search on 'status=On Loan' to see what is out there, and how long it's been there. No reporting or digging necessary.
We do the same for machines that are on demo at a customer site so we can keep tabs on the sales reps to see when they are going to get the paperwork signed.
Dealer Three Weighs In: We put loaners on a sales order using a "Loaner" order type. The order stays open as long as the loaner is out there. We ship the order when it is delivered. When this happens, we have Equipment History Tracking change the customer and require a meter read and it changes the equipment status and bill code. There is still maintenance to do on the equipment record because history tracking can't tell the difference between a 'loaner' shipped order and any other type of order, but this works well.
As mentioned above by the dealers some “put” them on a contract. Let’s see what that means:
Method 1 for putting on the contract:
Dealer: When we pick up a contract equipment and bring it into the shop to work on and place a 'loaner' in the interim period, I am doing the following:
On the svc contract: edit the original equipment and enter an end date and meter reading for the day that the equipment was picked up.
On the svc contract: add the 'loaner' equipment and enter a start date and meter reading for the day the equipment was placed; add the 'loaner' equipment to the meter group.
When the work is completed in the shop and we return the original equipment:
On the svc contract: add the original equipment back(as if it had never been there before)and enter a start date and meter reading for the day the equipment was returned; add the original equipment back to the meter
On the svc contract: edit the loaner equipment and enter an end date and meter reading for the day it was picked up. Will it stay on the meter group for billing? I don't think so....
This might occur on a copy block svc contract, cpc or any type of svc contract...
From Dealer Two: Same as above, then prorate: The prorate base amount box is used when the contract has a base charge that will need to be prorated due to removal or addition in the middle of the billing cycle. For example, if the billing cycle is from the first to the end of the month and the base rate is $100 and you remove the equipment on the 15th, checking the prorate box would cause the base to be billed as only $50 if the base had not already been billed OR as a credit of $50 if the base had already been billed. We use this feature all the time when equipment is traded in before the billing cycle is complete.
I suggest you use the prorate box anytime you remove or add a piece of equipment to the contract, either original equipment or loaner. We check the prorate box even when the contract does not have a base charge. Even though it has nothing to prorate it does display a note on the contract invoice showing early removal which makes the invoice easier to understand.
One thing that is NOT prorated is the allowed copies. It doesn't usually end up being a big deal, but I wanted you to be aware.
Also, when you add the original equipment back to the contract the equipment number will be displayed as "1234(2)". ECi says this is to keep the original's movement clear, so you can see it being removed/added multiple times.
Dealer One: The way I handle loaners is setting up a separate contract for the loaner machine so that the original contract is not affected. This way I am able to bill for the copies run on the loaner and exclude billing for the copies run on their equipment while in the shop for repair. I document the meter of their equipment when we pick it up and get the meter off it after repair is completed in the shop and we deliver the equipment back to them. The difference between the two meters is the amount of copies that I put as credit copies on their next contract billing. Then I bill the loaner contract out for the amount of copies they ran while the machine was at their location. After billing the loaner contract, I terminate it so it doesn't show up in my expiration reports. This allows me to have a complete and accurate history of the customers’ account. I can see exactly how long they had the loaner, which machine they had as a loaner and exactly how many copies they ran. This also prevents it from messing with the original equipment volume or copies allowed. This way you don’t have to manually prorate anything on the contract.
To recap: Set up a separate contract for the loaner and bill out on that contract for the copies run while they had the loaner. Track the copies run on the original piece of equipment while under repair. These copies are credited when billing the original contract. This way the customer is not being billed for the copies run by the technicians while fixing the machine, but they are billed for the copies run on the loaner. This also avoids any contract/service problems once the original equipment is returned and the loaner picked up. This also helps with the customers averages and service history. Everything is kept consistent and not transferred off the contract.
Note: How you handle loaners may further depend on how (and to whom) the contract is being billed. This issue came up with a lease... We put the new equip on the contract and the leasing company was so confused as to where this piece of equipment came from.