RPM - Set Up Unit Costing

Unit Costing automatically tracks depreciation on your rental equipment based on usage. When equipment goes on rent, the system calculates depreciation as a percentage of the rental value, giving you real-time insight into asset value and helping you make smarter replacement decisions.

Before You Begin

Unit Costing changes how replacement costs work. Here's what you need to know:

• Replacement costs become automatic: The system will calculate these based on original equipment cost
• Manual editing gets locked: You won't be able to manually change replacement costs once Unit Costing is active
• Existing values need preservation: If you have current replacement cost data, save it to reference fields first

Step 1: Preserve Your Existing Data

If you already have replacement cost values you want to keep for reference:

1. Open your RPM Unit Card Navigate to each unit that will use Unit Costing
2. Save current values Copy existing replacement cost values to custom reference fields on the unit card
3. Document for future reference Make note of where you've stored these values for historical comparison

Step 2: Configure G/L Accounts

Set up the accounts that will track your depreciation values.

1. Open General Posting Setup Search for and open "General Posting Setup"
2. Add depreciation tracking account In the RPM Unit Costing Accum. Depr. Account field, enter the G/L account where depreciation will accumulate

How it works: Depreciation posts here during rental periods and reverses when you sell the unit

1. Add asset account In the RPM Unit Costing Asset Account field, enter your asset G/L account

Think of this as: Your acquisition asset account for unit costing purposes

1. Save your setup Your accounting framework is now ready for unit costing

Step 3: Enable Unit Costing on Subcategories

Now you're ready to activate Unit Costing for specific equipment types.

1. Open the subcategory card Navigate to the subcategory you want to configure
2. Set the depreciation rate Enter your Unit Costing %

Example: Enter 2% if you want units to depreciate at 2% of rental value

1. Understand the change Once saved:
   • Original Equipment Cost becomes the new Replacement Cost
   • Replacement Cost field becomes read-only
   • All associated units inherit this setting
2. Save and confirm The subcategory and all its units are now configured for automatic depreciation

How Unit Costing Works During Rental

Once configured, here's what happens automatically:

1. Unit goes on contract Customer rents equipment with Unit Costing enabled
2. System calculates depreciation Takes the Unit Costing % of the rental amount
3. Values update in real-time
   • Replacement Cost decreases by the calculated amount
   • Depreciation posts to your configured G/L accounts
4. Track total depreciation View accumulated depreciation in your G/L reports

Managing Unit Sales

When you sell a unit with Unit Costing:

• Depreciation entries reverse automatically from the accumulation account
• Asset values adjust to reflect the sale
• Complete audit trail remains for historical reporting

Best Practices

• Start with a pilot group: Test Unit Costing on one subcategory before rolling out widely
• Set realistic percentages: Consider industry standards for your equipment type
• Monitor regularly: Review depreciation rates quarterly and adjust as needed
• Keep records: Document why you chose specific percentages for each subcategory

Common Scenarios

High-Value Equipment

For expensive machinery, consider lower Unit Costing percentages to reflect slower depreciation.

High-Turnover Items

Equipment that rents frequently might need higher percentages to account for increased wear.

Seasonal Equipment

Adjust percentages based on typical rental patterns throughout the year.

What's Next?

With Unit Costing configured, you can:

• Generate depreciation reports for tax purposes
• Make data-driven decisions about equipment replacement
• Price rentals based on true equipment costs
• Track ROI more accurately across your fleet

Need Help?

Setting up Unit Costing affects your financial reporting. We recommend:

• Consulting with your accounting team before implementation
• Testing in a sandbox environment first
• Reviewing our Knowledge Base for detailed examples

Questions? Create a support ticket and we'll walk you through your specific scenario.