Accounting Conventions and Procedures

Thursday, November 19, 2009 1:30p – 2:25p, Forest II

PJ Gustafson, Director of Educational Services

Agenda• General CSI Accounting Rules• Accounting Basics and

Definitions• Basic Transactions• Inventory Transactions and

Accounting• Inter-Site Transactions• Deferred Revenue• Installments• Installments and Deferrals

Together• Financing• Question and Answer

General CSI Rules• Balance-forward receivables only

– CSI does not handle open-Item receivables– Members only have ONE balance, and it is in the

Member A/R at their Home Site

• Spectrum NG is not a full Accounts Payable/General Ledger System– No Accounts Payable functions, no G/L reporting

• CSI Software uses Accrual-based accounting, not Cash-based

Accounting Basics• Account Types:

– Assets – what you own– Liabilities – what you owe– Equities – what you’ve earned (profits/losses)– Revenues – income– Expenses – what you’ve spent

• Debits and Credits– What you post to General Ledger accounts– Assets and Expenses – debit means you’re increasing what you

have, credit means you’re decreasing– Liabilities, Equities, and Revenues – debit means you’re

decreasing, credit means you’re increasing– All debits and credits must equal for G/L transactions

Accounting Definitions• A/R to G/L Posting

– Entering all of your sales transactions into the General Ledger

• Receivable– Money that is owed to you

• Payable– Money that you owe to

someone else

Accounting Definitions• Deferred Revenue

– Method of recognizing revenue over the period of time that the product or service is delivered

• Amortization– Process of recognizing

Deferred Revenue• Installment

– Method of paying a balance owed over a period of time

• Financing– Similar to installments, but

you can set up interest rates, balloon payments, and more

Basic TransactionsDate Cash Asset Member A/R Revenue

3/1/2007 $200.00 $200.00 $200.00 $200.00

• Revenue is credited• Cash is debited• A/R Account is used as pass-through

Inventory AccountingDate Cash Asset Inventory Asset Revenue COGS

3/1/2007 $1.25 $0.65 $1.25 $0.65

3/6/2007 $0.65 $0.65

• A bottle of water was sold on 3/1/2007 for $1.25, with a cost of $0.65

– Cash is debited for $1.25, Revenue is credited for $1.25– Inventory Asset is credited for $0.65, COGS is debited for $0.65

• An inventory adjustment is made on 3/6/2007 and one bottle of water is placed back into Inventory

– Inventory Asset is debited for $0.65, COGS is credited for $0.65• Cost is determined by amount entered when item is Received

– FIFO vs. LIFO• Inventory Receivings do not affect the G/L

– Inventory Asset is debited for received inventory when the bill for that product is entered into the A/P system

Inter-Site TransactionsDescription Cash Asset Member A/R Inter-Site A/R Xfer Inter-Site A/P Xfer RevenueSale Made $1.25(S1) $1.25(S2) $1.25(S1) $1.25(S2)Draft $1.25(S1) $1.25(S1)S1 Writes Check $1.25(S1) $1.25(S1)S2 Deposits Check $1.25(S2) $1.25(S2)

• Site 1 Member goes to Site 2 and buys a bottle of water for $1.25, and charges it to their account

• When Billing is processed, the member’s card is drafted at Site 1, but the revenue goes to Site 2.

• Site 1 now owes Site 2 the Cash for that transaction, and is accounted for through the Intersite A/R and Intersite A/P Accounts.

Deferred Revenue

• Monthly Recognition• Series Sales• Program Registration• Deposits• Gift Cards

Monthly Recognition• Setup

– Deferred Income = Yes– Deferred Months set

• Repetitives automatically defer over the repetitive period

– Deferred Account set– Revenue Account set

• When product is sold, schedule is created in the database, starting with the date of sale, unless set to Defer to Next Month

Monthly Recognition

• Membership sold on 3/1/2007 for $1200.00 and paid for with Cash, Check, or Credit Card, item is set to defer over 12 months

• Cash Asset is debited by $1200.00 and Deferred Liability account is credited by $1200.00

• Deferral schedule is created in the database and continues through 2/1/2008

Date Description Cash Asset Deferred Liability Membership Revenue Deferred Revenue Table3/1/2007 Sale $1,200.00 $1,200.00 Date Invoice Amount Posted

3/1/2007 12345 $100.00 No4/1/2007 12345 $100.00 No5/1/2007 12345 $100.00 No6/1/2007 12345 $100.00 No7/1/2007 12345 $100.00 No8/1/2007 12345 $100.00 No9/1/2007 12345 $100.00 No

10/1/2007 12345 $100.00 No11/1/2007 12345 $100.00 No12/1/2007 12345 $100.00 No1/1/2008 12345 $100.00 No2/1/2008 12345 $100.00 No

Monthly Recognition

• When A/R is Posted to G/L for 3/1/2007, the system will check the deferral schedule

• A/R Posting recognizes the deferral for 3/1/2007

Date Description Cash Asset Deferred Liability Membership Revenue Deferred Revenue Table3/1/2007 Sale $1,200.00 $1,200.00 Date Invoice Amount Posted3/1/2007 A/R to G/L Post $100.00 $100.00 3/1/2007 12345 $100.00 Yes

4/1/2007 12345 $100.00 No5/1/2007 12345 $100.00 No6/1/2007 12345 $100.00 No7/1/2007 12345 $100.00 No8/1/2007 12345 $100.00 No9/1/2007 12345 $100.00 No

10/1/2007 12345 $100.00 No11/1/2007 12345 $100.00 No12/1/2007 12345 $100.00 No1/1/2008 12345 $100.00 No2/1/2008 12345 $100.00 No

Monthly Recognition

• As A/R is Posted to G/L for the day of sale each month, the system will recognize the remaining deferrals, until all deferred revenue has been recognized

Date Description Cash Asset Deferred Liability Membership Revenue Deferred Revenue Table3/1/2007 Sale $1,200.00 $1,200.00 Date Invoice Amount Posted3/1/2007 A/R to G/L Post $100.00 $100.00 3/1/2007 12345 $100.00 Yes4/1/2007 A/R to G/L Post $100.00 $100.00 4/1/2007 12345 $100.00 Yes5/1/2007 A/R to G/L Post $100.00 $100.00 5/1/2007 12345 $100.00 Yes6/1/2007 A/R to G/L Post $100.00 $100.00 6/1/2007 12345 $100.00 Yes7/1/2007 A/R to G/L Post $100.00 $100.00 7/1/2007 12345 $100.00 Yes8/1/2007 A/R to G/L Post $100.00 $100.00 8/1/2007 12345 $100.00 Yes9/1/2007 A/R to G/L Post $100.00 $100.00 9/1/2007 12345 $100.00 Yes

10/1/2007 A/R to G/L Post $100.00 $100.00 10/1/2007 12345 $100.00 Yes11/1/2007 A/R to G/L Post $100.00 $100.00 11/1/2007 12345 $100.00 Yes12/1/2007 A/R to G/L Post $100.00 $100.00 12/1/2007 12345 $100.00 Yes1/1/2008 A/R to G/L Post $100.00 $100.00 1/1/2008 12345 $100.00 Yes2/1/2008 A/R to G/L Post $100.00 $100.00 2/1/2008 12345 $100.00 Yes

Refunding Deferred Items

• Membership sold on 3/1/2007 for $1200.00 and set to defer for 12 months

• Member cancels on 5/31/2007, refund given for $900.00, the remaining value of membership

• Item code selected at POS, it asks for original invoice #.• When original invoice is entered, the system finds the

remaining deferrals and posts them to revenue as of the date of the refund.

• Amount is refunded directly from the revenue account.

Date Description Cash Asset Deferred Liability Membership Revenue Deferred Revenue Table3/1/2007 Sale $1,200.00 $1,200.00 Date Invoice Amount Posted3/1/2007 A/R to G/L Post $100.00 $100.00 3/1/2007 12345 $100.00 Yes4/1/2007 A/R to G/L Post $100.00 $100.00 4/1/2007 12345 $100.00 Yes5/1/2007 A/R to G/L Post $100.00 $100.00 5/1/2007 12345 $100.00 Yes

5/31/2007 Rem. Def. Rec. $100.00 $100.00 5/31/2007 12345 $100.00 Yes5/31/2007 Rem. Def. Rec. $100.00 $100.00 5/31/2007 12345 $100.00 Yes5/31/2007 Rem. Def. Rec. $100.00 $100.00 5/31/2007 12345 $100.00 Yes5/31/2007 Rem. Def. Rec. $100.00 $100.00 5/31/2007 12345 $100.00 Yes5/31/2007 Rem. Def. Rec. $100.00 $100.00 5/31/2007 12345 $100.00 Yes5/31/2007 Rem. Def. Rec. $100.00 $100.00 5/31/2007 12345 $100.00 Yes5/31/2007 Rem. Def. Rec. $100.00 $100.00 5/31/2007 12345 $100.00 Yes5/31/2007 Rem. Def. Rec. $100.00 $100.00 5/31/2007 12345 $100.00 Yes5/31/2007 Rem. Def. Rec. $100.00 $100.00 5/31/2007 12345 $100.00 Yes5/31/2007 Refund Given $900.00 $900.00

Defer to Next Month• Typically used for Monthly

repetitives when the Billing Date is set to the 1st

• Since repetitives automatically defer over the repetitive period, monthly repetitives will only have 1 deferral

• The first deferral is automatically scheduled for the day of sale, so if the Billing Date is the 1st, it will be scheduled for the last day of the previous month

• When Defer to Next Month, revenue is held until the first of the following month, thus recognizing revenue in the proper month

Series Sales• Setup

– Rep. Freq. = Single– Series Sales = Yes– SS Quantity Entered– Deferred Income = Yes– Def. Account Set– Rev. Account Set

• System will recognize revenue over the usage of each session

Series Sales

• 10-Session PT Package is sold for $750.00 on 3/1/2007

• When each session from the package is used, it will be entered into the series sales usage table

Date Description Cash Asset Deferred Liability Training Revenue Series Sales Usage3/1/2007 Sale $750.00 $750.00 Date Use Site Type Quantity Amount Posted

Series Sales

• The member uses each of their sessions, with one Adjustment on 3/19/2007

• With each one the usage is recorded in the series sales usage table with an amount to recognize

Date Description Cash Asset Deferred Liability Training Revenue Series Sales Usage3/1/2007 Sale $750.00 $750.00 Date Use Site Type Quantity Amount Posted

3/1/2007 1 Use 1 $75.00 No3/3/2007 1 Use 1 $75.00 No

3/10/2007 1 Use 1 $75.00 No3/12/2007 1 Use 1 $75.00 No3/19/2007 1 Adjust -1 ($75.00) No3/21/2007 1 Use 1 $75.00 No3/28/2007 1 Use 1 $75.00 No3/30/2007 1 Use 1 $75.00 No4/1/2007 1 Use 1 $75.00 No4/3/2007 1 Use 1 $75.00 No4/5/2007 1 Use 1 $75.00 No

Series Sales

• As A/R is Posted to G/L, the system checks the series sales usage table to see if there are any usages that should be recorded

• Any deferrals are recognized as of the dates that the usages occurred

• The adjustment moves money in the opposite direction, from Revenue to Deferred

Date Description Cash Asset Deferred Liability Training Revenue Series Sales Usage3/1/2007 Sale $750.00 $750.00 Date Use Site Type Quantity Amount Posted3/1/2007 A/R Post $75.00 $75.00 3/1/2007 1 Use 1 $75.00 Yes3/3/2007 A/R Post $75.00 $75.00 3/3/2007 1 Use 1 $75.00 Yes

3/10/2007 A/R Post $75.00 $75.00 3/10/2007 1 Use 1 $75.00 Yes3/12/2007 A/R Post $75.00 $75.00 3/12/2007 1 Use 1 $75.00 Yes3/19/2007 A/R Post $75.00 $75.00 3/19/2007 1 Adjust -1 -$75.00 Yes3/21/2007 A/R Post $75.00 $75.00 3/21/2007 1 Use 1 $75.00 Yes3/28/2007 A/R Post $75.00 $75.00 3/28/2007 1 Use 1 $75.00 Yes3/30/2007 A/R Post $75.00 $75.00 3/30/2007 1 Use 1 $75.00 Yes4/1/2007 A/R Post $75.00 $75.00 4/1/2007 1 Use 1 $75.00 Yes4/3/2007 A/R Post $75.00 $75.00 4/3/2007 1 Use 1 $75.00 Yes4/5/2007 A/R Post $75.00 $75.00 4/5/2007 1 Use 1 $75.00 Yes

Refunding Deferred Series Sales

• Member purchases a 10-pack of training for $750.00 on 3/1/2007. They use four sessions, then break their leg and ask for a refund.

• On 3/20/2007, you refund $450.00, the value of their remaining sessions. When you do this, it will automatically recognize the remaining sessions on the day of the refund, then issue the refund directly from the revenue account.

Date Description Cash Asset Deferred Liability Training Revenue Series Sales Usage3/1/2007 Sale $750.00 $750.00 Date Type Quantity Amount Posted3/1/2007 A/R Post $75.00 $75.00 3/1/2007 Use 1 $75.00 Yes3/3/2007 A/R Post $75.00 $75.00 3/3/2007 Use 1 $75.00 Yes

3/10/2007 A/R Post $75.00 $75.00 3/10/2007 Use 1 $75.00 Yes3/12/2007 A/R Post $75.00 $75.00 3/12/2007 Use 1 $75.00 Yes3/20/2007 Rem. Def. Rec. $450.00 $450.00 3/20/2007 Refund 6 $450.00 Yes3/20/2007 Refund Given $450.00 $450.00

Inter-Site Series Sales UsageDate Description Cash Asset I-S SS A/R Xfer I-S SS A/P Xfer Deferred Liability Revenue

3/1/2007 Sale $750.00(S1) $750.00(S1)3/1/2007 A/R Post $75.00(S1) $75.00(S1)3/3/2007 A/R Post $75.00(S1) $75.00(S1)

3/10/2007 A/R Post $75.00(S1) $75.00(S1)3/12/2007 A/R Post $75.00(S1) $75.00(S1)3/19/2007 A/R Post $75.00(S1) $75.00(S1)3/21/2007 A/R Post $75.00(S1) $75.00(S1)3/28/2007 A/R Post $75.00(S1) $75.00(S1)3/30/2007 A/R Post $75.00(S1) $75.00(S1)4/1/2007 A/R Post $75.00(S1) $75.00(S1)4/3/2007 A/R Post $75.00(S1) $75.00(S1)4/5/2007 A/R Post $75.00(S2) $75.00(S1) $75.00(S1) $75.00(S2)

4/30/2007 Site 1 Check $75.00(S1) $75.00(S1)4/30/2007 Site 2 Deposit $75.00(S2) $75.00(S2)

Series Sales UsageDate Use Site Use Type Quantity Amount Posted

3/1/2007 1 Use 1 $75.00 No3/3/2007 1 Use 1 $75.00 No

3/10/2007 1 Use 1 $75.00 No3/12/2007 1 Use 1 $75.00 No3/19/2007 1 Adjust -1 -$75.00 No3/21/2007 1 Use 1 $75.00 No3/28/2007 1 Use 1 $75.00 No3/30/2007 1 Use 1 $75.00 No4/1/2007 1 Use 1 $75.00 No4/3/2007 1 Use 1 $75.00 No4/5/2007 2 Use 1 $75.00 No

• Package sold at Site 1 & set to defer

• Member uses a session at Site 2

• Site 1 owes Site 2 for performing that session

Program Registration

• Setup– Set item code to defer– Go to Session Course

Pricing Setup– Choose Defer by

Program or Defer by Product

Program Registration Deferral MethodsProgram

– Divides enrollment cost by number of Classes

– Creates deferral schedule in database to recognize a portion of revenue on each class date

Product– If “Defer at Sale” is Yes, will

defer starting on day of sale over number of months set up on item code

– If “Defer at Sale” is No and options populated, will defer starting on selected date and for selected number of months

Prog. Reg. – Defer by Program

• Program Costs $500.00 for 10 classes.• Classes Scheduled for April 1, 3, 5, 8, 10, 12,

15, 17, 19, and 22.• Member enrolls on 3/1/2007 and pays via

Cash, Check or Credit Card• System creates Deferral Schedule in the

deferral table

Date Description Cash Asset Deferred Liability Program Revenue Deferred Revenue Table3/1/2007 Enrollment $500.00 $500.00 Date Invoice Amount Posted

4/1/2007 12345 $50.00 No4/3/2007 12345 $50.00 No4/5/2007 12345 $50.00 No4/8/2007 12345 $50.00 No

4/10/2007 12345 $50.00 No4/12/2007 12345 $50.00 No4/15/2007 12345 $50.00 No4/17/2007 12345 $50.00 No4/19/2007 12345 $50.00 No4/22/2007 12345 $50.00 No

Prog. Reg. – Defer by Program

• As A/R is Posted to G/L, the Deferred Revenue is debited by $50.00 and the Program Revenue is credited by $50.00 as of the day that each class takes place.

Date Description Cash Asset Deferred Liability Program Revenue Deferred Revenue Table3/1/2007 Enrollment $500.00 $500.00 Date Invoice Amount Posted4/1/2007 A/R Posting $50.00 $50.00 4/1/2007 12345 $50.00 Yes4/3/2007 A/R Posting $50.00 $50.00 4/3/2007 12345 $50.00 Yes4/5/2007 A/R Posting $50.00 $50.00 4/5/2007 12345 $50.00 Yes4/8/2007 A/R Posting $50.00 $50.00 4/8/2007 12345 $50.00 Yes

4/10/2007 A/R Posting $50.00 $50.00 4/10/2007 12345 $50.00 Yes4/12/2007 A/R Posting $50.00 $50.00 4/12/2007 12345 $50.00 Yes4/15/2007 A/R Posting $50.00 $50.00 4/15/2007 12345 $50.00 Yes4/17/2007 A/R Posting $50.00 $50.00 4/17/2007 12345 $50.00 Yes4/19/2007 A/R Posting $50.00 $50.00 4/19/2007 12345 $50.00 Yes4/22/2007 A/R Posting $50.00 $50.00 4/22/2007 12345 $50.00 Yes

Prog. Reg. – Defer by Product

• Program costs $500.00, to be deferred over 5 months starting on August 1

• Member enrolls on 3/1/2007 and pays by cash, check, or credit card

• System creates deferral schedule in tblartransdeferred

Date Description Cash Asset Deferred Liability Program Revenue Deferred Revenue Table3/1/2007 Enrollment $500.00 $500.00 Date Invoice Amount Posted

8/1/2007 12345 $100.00 No9/1/2007 12345 $100.00 No

10/1/2007 12345 $100.00 No11/1/2007 12345 $100.00 No12/1/2007 12345 $100.00 No

Prog. Reg. – Defer by Product

• As A/R is Posted to G/L for each deferral date, the Deferred Revenue is debited by $100.00 and the Program Revenue is credited by $100.00 until all 5 months have been recognized.

Date Description Cash Asset Deferred Liability Program Revenue Deferred Revenue Table3/1/2007 Enrollment $500.00 $500.00 Date Invoice Amount Posted8/1/2007 A/R Posting $100.00 $100.00 8/1/2007 12345 $100.00 Yes9/1/2007 A/R Posting $100.00 $100.00 9/1/2007 12345 $100.00 Yes

10/1/2007 A/R Posting $100.00 $100.00 10/1/2007 12345 $100.00 Yes11/1/2007 A/R Posting $100.00 $100.00 11/1/2007 12345 $100.00 Yes12/1/2007 A/R Posting $100.00 $100.00 12/1/2007 12345 $100.00 Yes

Canceling from a Deferred Program

• Program Costs $500.00 for 10 classes.• Classes Scheduled for April 1, 3, 5, 8, 10, 12,

15, 17, 19, and 22.• Member enrolls on 3/1/2007 and pays via

Cash, Check or Credit Card• System creates Deferral Schedule in the

deferral table

Date Description Cash Asset Deferred Liability Program Revenue Deferred Revenue Table3/1/2007 Enrollment $500.00 $500.00 Date Invoice Amount Posted

4/1/2007 12345 $50.00 No4/3/2007 12345 $50.00 No4/5/2007 12345 $50.00 No4/8/2007 12345 $50.00 No

4/10/2007 12345 $50.00 No4/12/2007 12345 $50.00 No4/15/2007 12345 $50.00 No4/17/2007 12345 $50.00 No4/19/2007 12345 $50.00 No4/22/2007 12345 $50.00 No

Canceling from a Deferred Program

• Member Cancels from program on 4/7/2007

• All remaining deferrals are recognized on that day

• Refund of remaining value is issued directly from Program Revenue

Date Description Cash Asset Deferred Liability Program Revenue Deferred Revenue Table3/1/2007 Enrollment $500.00 $500.00 Date Invoice Amount Posted4/1/2007 A/R Posting $50.00 $50.00 4/1/2007 12345 $50.00 Yes4/3/2007 A/R Posting $50.00 $50.00 4/3/2007 12345 $50.00 Yes4/5/2007 A/R Posting $50.00 $50.00 4/5/2007 12345 $50.00 Yes4/7/2007 Rem. Def. Rec. $350.00 $350.00 4/7/2007 12345 $50.00 Yes4/7/2007 Refund Issued $350.00 $350.00 4/7/2007 12345 $50.00 Yes

4/7/2007 12345 $50.00 Yes4/7/2007 12345 $50.00 Yes4/7/2007 12345 $50.00 Yes4/7/2007 12345 $50.00 Yes4/7/2007 12345 $50.00 Yes

Deposits• Setup

– Create Item code and link to appropriate Deposit liability account

– Select deposit item code on Program, Equipment, or Function

Program Deposits

• Program total cost is $300.00• Member enrolls in a program on

3/1/2007 and pays a $50.00 deposit• Member pays for program on 6/1/2007,

and the deposit amount is applied. The remaining $250.00 is collected from the Member.

Date Description Cash Asset Deposit Liability Program Revenue3/1/2007 Enrollment $50.00 $50.006/1/2007 Pay POS $250.00 $50.00 $300.00

Canceling from Program w/ Deposit

• Member enrolls in a program on 3/1/2007 and pays a $50.00 non-refundable deposit

• Member cancels from program on 6/1/2007 – cancellation fee of $50.00 is applied

• Deposit amount covers fee, so nothing more is collected from the member

Date Description Cash Asset Deposit Liability Program Revenue3/1/2007 Enrollment $50.00 $50.006/1/2007 Cancel $50.00 $50.00

Gift Cards• Setup

– Gift Card Product Code• Point to Liability Account

– Gift Card Bank• Point to same Liability Account

– Link Gift Card Payment type to Gift Card Bank

• Use– When it’s sold, cash is debited

and liability is credited– When it’s redeemed, liability is

debited and revenue for item purchased is credited

– If used at another site, transfers take place through the Inter-Site Gift Card A/R & A/P X-fers

Installments• Setup

– Create Installment A/R Account (should be different than the Member A/R Account)

– Create Installment item code that is linked to the Installment A/R Account

– Select the Installment item code in Site A/R Setup and Contract Setup

Installments

• Member buys $500.00 item on 3/1/2007. They pay a $50.00 down payment, and the remaining $450.00 is set up to be paid in 3 installments starting on 4/1/2007.

• Cash is debited by $50.00, Installment A/R is debited by $450.00, and Revenue is credited by $500.00.

• The system automatically creates a repetitive using the Installment item code to charge $150.00 three times, starting on 4/1/2007

Date Description Cash Asset Member A/R Installment A/R Revenue Repetitive Table3/1/2007 Sale $50.00 $450.00 $500.00 Next Date Amount Quantity

4/1/2007 $150.00 3

Installments

• When you process billing on 4/2/2007, the installment will be charged to the member’s account as of 4/1/2007 – Installment A/R is credited and Member A/R is debited

• When the member’s EFT or Credit Card is drafted, or they pay their balance, Cash will be debited and Member A/R will be credited

Date Description Cash Asset Member A/R Installment A/R Revenue Repetitive Table3/1/2007 Sale $50.00 $450.00 $500.00 Next Date Amount Quantity4/1/2007 Installment $150.00 $150.00 5/1/2007 $150.00 24/2/2007 Payment $150.00 $150.00

Installments

• The process repeats with each monthly billing until all installments have been charged

Date Description Cash Asset Member A/R Installment A/R Revenue Repetitive Table3/1/2007 Sale $50.00 $450.00 $500.00 Next Date Amount Quantity4/1/2007 Installment $150.00 $150.00 7/1/2007 $150.00 04/2/2007 Payment $150.00 $150.005/1/2007 Installment $150.00 $150.005/2/2007 Payment $150.00 $150.006/1/2007 Installment $150.00 $150.006/2/2007 Payment $150.00 $150.00

Canceling Installments• Procedure

– Delete the Installment from the member’s account

– Remaining value will automatically be charged to member’s account

– Go to POS and pull up the item code you’re refunding and enter the refund amount

– Go to the Payments screen and CTA the remaining installment amount

– Issue the refund using Cash, Check or Credit Card

Canceling Installments

• Member purchased item on 3/1/2007 and paid $50.00 down payment. Remaining amount set up to be paid in 3 installments of $150.00/mo for 3 months

• Billing processed on 4/2/2007 – First installment charged as of 4/1/2007 and payment collected on 4/2/2007

• Member requests refund and you refund them $400.00• Delete the Installment – the $300.00 remaining amount

is automatically charged to the member’s account• Refund the original item code for $400.00, CTA the

($300.00) and give back the remaining $100.00 via Cash, Check, or Credit Card

Date Description Cash Asset Member A/R Installment A/R Revenue Repetitive Table3/1/2007 Sale $50.00 $450.00 $500.00 Next Date Amount Quantity4/1/2007 Installment $150.00 $150.00 5/1/2007 $150.00 24/2/2007 Payment $150.00 $150.00

4/15/2007 Delete Install $300.00 $300.004/15/2007 Refund $100.00 $300.00 $400.00

Installments and Deferrals• Member purchases

membership for $1200.00 on 3/1/2007, to be deferred over 12 months

• Member pays $200.00 down payment and Installment plan created to pay remaining $1000.00 over 4 months, starting on 4/1/2007.

Installments and DeferralsDate Description Cash Asset Member A/R Installment A/R Deferred Liability Membership Revenue

3/1/2007 Sale $200.00 $1,000.00 $1,200.00

Deferred Revenue Table Repetitive TableDate Invoice Amount Posted Next Charge Amount Quantity

3/1/2007 12345 $100.00 No 4/1/2007 $250.00 44/1/2007 12345 $100.00 No5/1/2007 12345 $100.00 No6/1/2007 12345 $100.00 No7/1/2007 12345 $100.00 No8/1/2007 12345 $100.00 No9/1/2007 12345 $100.00 No

10/1/2007 12345 $100.00 No11/1/2007 12345 $100.00 No12/1/2007 12345 $100.00 No1/1/2008 12345 $100.00 No2/1/2008 12345 $100.00 No

• Cash is debited by $200.00 for downpayment, Installment A/R is debited by $1000.00, and Deferred Liability is credited by $1200.00

• Deferral schedule is created in tblartransdeferred

• Installment repetitive is created in tblarrepetitive

Installments and DeferralsDate Description Cash Asset Member A/R Installment A/R Deferred Liability Membership Revenue

3/1/2007 Sale $200.00 $1,000.00 $1,200.003/1/2007 A/R Posting $100.00 $100.004/1/2007 A/R Posting $100.00 $100.004/1/2007 Installment $250.00 $250.004/2/2007 Payment $250.00 $250.005/1/2007 A/R Posting $100.00 $100.005/1/2007 Installment $250.00 $250.005/2/2007 Payment $250.00 $250.006/1/2007 A/R Posting $100.00 $100.006/1/2007 Installment $250.00 $250.006/2/2007 Payment $250.00 $250.007/1/2007 A/R Posting $100.00 $100.007/1/2007 Installment $250.00 $250.007/2/2007 Payment $250.00 $250.008/1/2007 A/R Posting $100.00 $100.00

Deferred Revenue Table Repetitive TableDate Invoice Amount Posted Next Charge Amount Quantity

3/1/2007 12345 $100.00 Yes 8/1/2007 $250.00 04/1/2007 12345 $100.00 Yes5/1/2007 12345 $100.00 Yes6/1/2007 12345 $100.00 Yes7/1/2007 12345 $100.00 Yes8/1/2007 12345 $100.00 Yes9/1/2007 12345 $100.00 No

10/1/2007 12345 $100.00 No11/1/2007 12345 $100.00 No12/1/2007 12345 $100.00 No1/1/2008 12345 $100.00 No2/1/2008 12345 $100.00 No

• As you Post A/R to G/L for the 1st of each month, $100.00 gets moved from Deferred Revenue to Membership Revenue

Installments and DeferralsDate Description Cash Asset Member A/R Installment A/R Deferred Liability Membership Revenue

3/1/2007 Sale $200.00 $1,000.00 $1,200.003/1/2007 A/R Posting $100.00 $100.004/1/2007 A/R Posting $100.00 $100.004/1/2007 Installment $250.00 $250.004/2/2007 Payment $250.00 $250.005/1/2007 A/R Posting $100.00 $100.005/1/2007 Installment $250.00 $250.005/2/2007 Payment $250.00 $250.006/1/2007 A/R Posting $100.00 $100.006/1/2007 Installment $250.00 $250.006/2/2007 Payment $250.00 $250.007/1/2007 A/R Posting $100.00 $100.007/1/2007 Installment $250.00 $250.007/2/2007 Payment $250.00 $250.008/1/2007 A/R Posting $100.00 $100.00

Deferred Revenue Table Repetitive TableDate Invoice Amount Posted Next Charge Amount Quantity

3/1/2007 12345 $100.00 Yes 8/1/2007 $250.00 04/1/2007 12345 $100.00 Yes5/1/2007 12345 $100.00 Yes6/1/2007 12345 $100.00 Yes7/1/2007 12345 $100.00 Yes8/1/2007 12345 $100.00 Yes9/1/2007 12345 $100.00 No

10/1/2007 12345 $100.00 No11/1/2007 12345 $100.00 No12/1/2007 12345 $100.00 No1/1/2008 12345 $100.00 No2/1/2008 12345 $100.00 No

• As you Process Billing on the 2nd of each month, the installment repetitive will be charged on the 1st, and the autopay credited on the 2nd until all installments have been collected

Financing• Similar to

Installments, except that you can charge interest, setup a payment plan, accept early payments, refinance mid-term, and accept balloon payments

Financing Formula

• Standard Banking Formula• Rate = APR/12

Financing Formula• Example:

– Principal = $1000.00– APR = 12%– Months = 12

Monthly Payment = [rate + rate/[1 + rate]^months – 1] x principalMonthly Payment = [.01 + .01/[1 + .01]^12 – 1] x $1000.00

Monthly Payment = [.01 + .01/1.1268 – 1] x $1000.00Monthly Payment = [.01 + .01/.1268] x $1000.00

Monthly Payment = [.01 + .07885] x $1000.00Monthly Payment = .08885 x $1000.00

Monthly Payment = $88.85

Financing Schedule• System automatically creates the schedule• Payments are collected with Billing, just like Installments

Finance Accounting

• Member finances $1000.00 item for 12 months at a 12% APR, starting on 8/1/2008

• Revenue is credited and Finance is debited for the principal amount

• Schedule is automatically created

Date Description Cash Asset Member A/R Finance A/R Principal Revenue Interest Revenue7/8/2008 Sale $1,000.00 $1,000.00

Finance Accounting

• As Billing is processed on the 2nd of each month, the Finance Payments will be charged to the member’s account as of the 1st.

• If the member uses autopay, the draft will be posted as of the 2nd of the month.

Date Description Cash Asset Member A/R Finance A/R Principal Revenue Interest Revenue7/8/2008 Sale $1,000.00 $1,000.008/1/2008 Payment Charged $88.85 $78.85 $10.008/2/2008 Auto Draft $88.85 $88.859/1/2008 Payment Charged $88.85 $79.64 $9.219/2/2008 Auto Draft $88.85 $88.85

10/1/2008 Payment Charged $88.85 $80.43 $8.4210/2/2008 Auto Draft $88.85 $88.8511/1/2008 Payment Charged $88.85 $81.24 $7.6111/2/2008 Auto Draft $88.85 $88.8512/2/2008 Payment Charged $88.85 $82.05 $6.80

Early Payments• When a member pays more than their payment amount, the entire

surplus is applied to the Principal• The system then recalculates based on whether you chose a Fixed

Monthly Payment or Fixed Term in the setup.

Fixed Monthly Payment

Early Payments

Fixed Term

Question & Answer

Account Managers

Eastern North

America

Western North

America

Toni Grafner Randy Cruz

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