Monthly Archives: January 2015

Tip #247 – Understanding the A/R Module – Part 2


Tip #247
Understanding the A/R Module – Part 2

ON ACCOUNT Transactions

Orders with an ON ACCOUNT method of payment, payments on account and finance/rebilling charges all generate records that is kept in a “transactions” file. Cash orders do not generate records in this file.

When an order with an ON ACCOUNT method of payment is created, in addition to a record being created in the “transactions” file, another record is created in the “aging open invoices” file.
These are the records of outstanding charges you see when you apply a payment on account. In addition, the customer’s profile record is updated by increasing the total of the purchases made.

So if this is the first order that I place with you is for a total of $100.00 and the method of payment is ON ACCOUNT, there will be 1 record in the “transactions” file for the total of the invoice, 1 record in the “aging open invoices” file for the total of the invoice and my customer’s profile record will show that I’ve made 1 purchase for $100.00.

We have 3 different places that will show that I have a $100.00 balance and the account will be in balance.

Now I send in a payment for $50.00.

A record is added in the transactions file for the total of the payment ($50.00), the record in the “open charges” record balance is reduced by the amount of the payment and will now show a $50.00 balance and the customer’s profile record will get updated to show that $50.00 payment. When you compare those 3 balances, they should all show $50.00 and the account will still be in balance.

Here are some pictures to help you visualize it…


Above is the way a brand new account should look.


I place my first order for $100.00 with an ON ACCOUNT method of payment.


My customer’s profile record now looks like this.


There will be one record in the “transactions” file showing my $100.00 purchase.

There will also be a record in the “aging open invoices” file showing the balance of my $100.00 purchase.

As you can see all 3 balances match, so if I audit my account this is what I get…


Now, I’m going to send you a payment for $50.00









As you can see, my account is still in balance because all 3 balances add up to $50.00.

If I now send you another payment for $50.00, all 3 balances should add up to $0.00. The only difference is that the “aging invoice” record gets deleted because it is no longer needed.

But let’s see what happens if I send you a payment for $75.00 when I only owe you $50.00.




The overpayment is recorded and now my account will look like this…




Again, the account is in balance because all 3 balances add up to $ -25.00.

More later…

Tip #245 – Understanding the A/R Module – Part 1


Tip #245
Understanding the A/R Module – Part 1

In order to really understand the A/R module of flowerSoft, you really have to know what happens when you enter an order into flowerSoft.

First of all, A/R or Accounts Receivable deals only with orders having an ON ACCOUNT method of payment and therefore only with “house” accounts.
Orders with any other type of payment do not interface or affect the A/R module.
Many of you are familiar with the term “out of balance” account that flowerSoft uses to indicate to you that something is wrong with the account.
“How does an account go out of balance?”, you ask. Well, there is a couple of ways but first let me explain how flowerSoft keeps track of A/R transactions.

When you enter an ON ACCOUNT order in flowerSoft, three different files are affected by the transaction.

  1. The customer profile record is updated to reflect a new outstanding balance.
    The “Charges” field is increased by the total amount of the order and the “Balance” field is recalculated by subtracting the amount in the “Payments” field from the amount in the “Charges” field.
    So now we have an “Outstanding” balance in the customer’s profile record.
  2. flowerSoft also adds a record of the transaction to a file we’ll refer to as the “statement transactions” file. The only transactions that go in this file are orders with an ON ACCOUNT method of payment, finance or rebilling charges, and “on account” payments or credits to “house” accounts.
    The records in this file are never deleted. So if you add all the debits and subtract from that amount all the credits, you should come up with an “outstanding” balance. This “outstanding” balance should match the amount in the “Balance” field in the client’s profile record.
  3. flowerSoft also adds another record to a file we’ll call the “open invoices” file. When an order with an ON ACCOUNT method of payment gets created, a record is added to this file for the amount of the order.
    When finance/re-billing charges are calculated, a record (even if for $0 Dollars) is also added to this file.
    When a customer makes an “on account” payment, the records in this file either get deleted if paid in full or their outstanding balance is reduced by the amount of the payment applied against them.
    When a customer has several invoices with outstanding amounts and the payment received does not match the outstanding balance, flowerSoft displays a list of the outstanding invoices. Those invoices are the records kept in this file.
    If you add up all the outstanding balances in this file, you come up with another “outstanding” amount for each account. This amount should also match the “outstanding amount” of the statement transactions file and the “Balance” field of the client’s profile file.

So in essence, you have a customer’s outstanding balance in 3 different files. If these balances are not all the same, the account is said to be “out of balance.”

If everything goes right during the order-taking and payment-recording processes, you will not have any out of balance accounts. However, this is not always the case.
Sometimes you will have an error occur after the invoice prints (always after the invoice prints) that will prevent the posting to these files to complete and that is when an out of balance account will come up.
It may be that only 2 or the 3 files got updated or maybe only 1 of the 3. If the order-taking process does not complete without generating an error, an out of balance account will be created.
The same is true for the on account payments entry. It should complete without errors.

Another way to create an out of balance account is to enter a COD or Pay on Pickup order for the account. The account will be out of balance until that order is paid.
Why? Because the “Charges” amount was increased by the order, but since there was no payment at the time the “Payments” field did not also increase.
So now that balance in the client’s profile record will be different than the balance in the “statement transactions” file and the “outstanding invoices” file.
This, however, is an acceptable situation because it will be corrected as soon as you pay the COD or Pay on Pickup order.

So for now, I just want you to understand what takes place when an ON ACCOUNT order get created.

More later…

Tip #244 – One Way to Handle a Large Pre-Payment


Tip #244
One Way to Handle a Large Pre-Payment

I received an email today from a flowerSoft customer asking this question…

Hey G–

I have a Church that wants to pay a year in advance, how should I
go about that in FS’s accounts receivables?
Or should I just make an invoice with 52 quantities and do it that way? 
What are your thoughts?

I will say they do order other things, like for the Holidays, Poinsettias and Easter Lillies.

This is like their standing order every Friday for their Altar arrangement.

Thanks

This is what I answered.

Here is an idea (in pictures) that should work well because the order is tax exempt…


Make 1 order to cover the entire year to take care of the payment.  Make sure to include the delivery charge (if any) as a separate line item.



I’m assuming they are paying you with a check, but if they have a house account you could make the method of payment ON ACCOUNT and then record the payment when they send you the check.
Just avoid entering the payment before they account has been charged so that there will be no overpayment to deal with.


This is what the finished order should look like.

Then, preferably sometime before the delivery date or on the delivery day of the first order, enter a new order reflecting a single week of the total order. Something like this…


and the use the PREPAID method of payment. If you don’t have it, let me know and I’ll add it for you.



This is how that order should look like when finished. Since the order has a PREPAID method of payment, there will be no balance due and the account’s outstanding balance will not change.

Then go to the recurring orders menu…








Now you have 51 recurring orders all with a PREPAID method of payment and no need to deal with a large overpayment in A/R

I think this works better that entering one big payment that creates an overpayment credit.  Then you’ll have to deal with applying that overpayment every time they make a separate purchase.

I said this works well because is a tax free order. 
If it had been a taxable order, you would have to pay the sales tax up front and then make the recurring orders tax free, which may have required some explanation if audited. 
You could also make the big order tax free, add the total sales tax as a line item and then make all the recurring orders taxable.
That may be a subject for your accountant, so if you ever have this case with a taxable account you should him or her for advice on how to handle.

Hope this helps.

If anyone reading this has a better or different way of how this could have been handled, please let me know.
Thanks

 

 


 

Tip #243 – Making Sure Your Monthly Statements Run Completed Successfully


Tip #243
Making Sure Your Monthly Statement Run Completed Successfully

Through the years, some of you have reported that at times the monthly statement run stops before it completes.
This results in some of your customers not receiving a monthly statement when they should have gotten one.

When the monthly statement run completes successfully, you should see the following message from flowerSoft…


It will tell you how many customers were selected to receive statements and how many statements were actually generated.
If you do not see this message at the end of the statement run, the run did not complete.

Some of you have this happen every time you do a monthly statement run and have resorted to breaking up the run alphabetically, like running A-K first and then L-Z.

This may work sometimes, but not always. Sometimes the run will stop after running just a couple of accounts, while other times it will run almost to the end and then end abruptly.

The only reason I have ever found for the statement run not completing in some systems, is because a scheduled task will run in the middle of the statement run.

So, if this is happening to you, the best way to prevent it is by disabling the scheduled tasks before you run the statements and then enabling them after you finish running your monthly statements.

To disable the scheduled tasks, do the following…

There may be a folder on your desktop called “Scheduled Tasks”


Double-click on it if there is.

If there is not, find the task scheduler program by searching for it…


and then creating a shortcut on your desktop by right-clicking on it and following the steps below.



Now the scheduled task folder should be on your desktop.

Double-click on it and this or something similar (depending on your Windows version) will come up…


Notice the 2 entries that read “Dove Plus Sentinel” and “Mercury Direct Sentinel”.

You may have only one, depending on whether you belong to both wire services or not.

I am going to assume for this explanation that you have both.

Right-click on the Dove Plus Sentinel and you’ll see this…


Click on Properties


Note the check-mark left of “Enabled”

Click on that to take it off.


Then click on “Apply” and “OK”

Do exactly the same thing for the “Mercury Direct Sentinel” entry.

Now run your statements. They should complete normally and you should see the message about how many customers were selected and how many statements were generated.

After you finish running your statements, take the same steps as above but instead of taking the check-mark off, put it back on and the scheduled tasks will run again.


Make sure this is the only thing you change. Changing other things may prevent the task(s) from running.

Another thing you should do after the statements run is print the statement assurance report…


This report will tell you if a statement was generated for each and every one of the “house” accounts that owe you money.

Please remember that if you fail to go through the “Calculate Finance/Re-Billing Charges” step, some of the accounts will not receive a statement.

If everything went well, you should see this message…


If you see any accounts come up in the statement assurance report, you cab generate Master statements for those accounts by selecting option #6…


Another option you could use to avoid the monthly statement run from ending abnormally is to do the statement run from a computer other than the one that hosts the scheduled tasks.

Either way, always make sure that all your accounts have received a statement.