This is part 3 of 6 in our series on managing groups in Trams Back Office.
Many times, before too much thought has gone into it, payments start coming in for a Group and immediately we begin entering invoices. Without proper planning, what can be simple and straightforward becomes chaotic and confusing!
When payments begin for a Group, before making any entries into Trams Back Office, be sure you have reviewed the following 2 options and have thought through the results of your entries. Entering a Group properly from the beginning is simple; going back and cleaning up Group entries can be quite challenging. In this section we learn the two most common methods for accounting for Groups, and the pro’s and con’s for each method. The first method is called Accounting as Departing. The second method is Accounting as Payments are Received.
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Option #1: Accounting As Departing |
Pros |
Cons |
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The sales, cost of sales and income are all accounted for when the Group is completed or has departed. As payments come in from clients, Client Vouchers are created. As payments go out to vendors, Vendor Vouchers are created.
Option #1 is the most commonly used method by Trams users because of its simplicity. Managed mostly in the back office, the front office only creates invoices once at the end of the Group. (Unless ARC tickets are needed, in which case the back office would create those as well.) |
1. Probably the simplest, cleanest way of handling Groups, since no sales or income are accounted for until numbers are final. Simple, because only vouchers are created not invoices. This makes tracking Group payments simple because vouchers have a field for the Group code. As payments come in and go out, vouchers are created, leaving the money on account. Once all money has been received, and all money paid out, invoices are created to close out the Group.
2. Since sales and cost of sales are accounted for at the same time, yield (fancy buzz word for commission percent) is not distorted. Since no invoices are being created, no sales are recorded on the general ledger for the deposits. Once all payments have been received and made, invoices are created. At that time, sales and income are accounted for in the same accounting period. |
1. Although it is a simpler, cleaner method, fewer management reports can be obtained since invoices are not entered until the Group is completed.
2. Since invoices are not entered until the Group is completed, final or ongoing payments due are not tracked in Trams Back Office, only what's been paid to date.
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Option #2: Accounting As Payments are Received |
Pros |
Cons |
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The sales and cost of sales for the Group are accounted for as payments are received from the clients for the amount received. The income is accounted for when the Group is completed or has departed.
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1. More management reporting capabilities, although slightly more complicated. Since invoices are created for each and every payment received, there are more reporting capabilities. Slightly more complicated, because the agents must now remember to place the Group code on many more invoices.
2. Since invoices are being entered as payments are received, the final payment date field can be utilized to track future payment dates and amounts. Since invoices are being created, reports in the report generator can be used to track when payments are due, not just what has been received. |
1. Since sales and cost of sales are being accounted for at different times, yield is distorted on a month-to-month basis. Using this method, we are accounting for sales every time a payment is received. When you look at financial statements, you see high sales with no income in one month. Then in later months you will see low sales with high income.
2. ARC/BSP documents subsequently issued for payments previously collected and invoiced require refund entries and can cause confusion. (This is explained in greater detail in future sections.) |
Application for Option #1 Accounting as Departing if you use a Single Vendor Profile
Follow these procedures if you have decided to use Option #1, Accounting as Departing with a Single Vendor Profile:
- As payments are collected from clients, enter those payments under Payments|Received from the client and create a voucher. Be sure to enter the name of the Group in the Group field of the voucher.
- When payments are refunded to clients, (before invoices have been issued), enter those payments under Payments|Made to the client and close the voucher. If the refunded amount is less than the voucher amount, close the voucher and create a new one for the difference when prompted.
- At any point, to see what has been collected from clients for the Group, select Reports|Client|Statement, set Report Type to Summary, and Format to Group. Then enter the common Group name entered into each client voucher in the Invoice Group field.
- As payments are sent out to vendors for the Group, enter those payments under Payments|Made to profile type of Vendor, for the name use the Group vendor). Create a voucher for this payment. (When prompted for a client name, use the Corporate profile created for the Group.) If multiple vendors are involved enter the vendor name and any other payment remarks in the Remarks field. Also use the Name on Check field so the check prints to the actual vendor, and not Group vendor. Be sure to use only the one vendor profile built specifically for the Group.
- When payments are returned or refunded from vendors for the Group (before invoices have been issued) enter those payments under Payment|Received from the vendor, and close the vouchers.
- At any point to see what has been sent out for the Group as a whole, select Reports|Payments|Payment Analysis, set Profile Type to All and select the Group name under the Payment Group field.
- Issue invoices for any ARC/BSP documents for the Group as you would for individual business. If the client pays by credit card, and the agency is not processing the credit card. Create a supplier invoice and close the client side with the client credit card.
Application for Option #1 - Accounting as Departing if you use Multiple Vendor Profiles
Steps for using Multiple Vendor Profiles are the same as using a Single Vendor Profile, with the exception of Step 4: As payments are sent out to vendors for the Group, enter those payments under Payments|Made. Enter a payment to each individual vendor and create a voucher.
Frequently Asked Questions
Q: If I create vouchers for client payments, how can I give the clients a receipt of what’s been paid up to any certain date?
A: Check with your reservation system. Each system has a method of producing client receipts without producing back office accounting lines.
Q: If I am creating vouchers, and I have a client that wants a refund, I know that I do a payment made and close the voucher. What if I want to charge the client a transaction fee?
A: Anytime the agency is charging a transaction fee, a sales invoice should be created that is submit to supplier, with the agency as the vendor. The total fare and the commission are the same amount; the amount of the transaction fee. When you issue a check to the client, close off both the voucher and invoice. (Create your invoice for the amount of the voucher minus the amount of the transaction fee.)
Application for Option #2 Accounting as Payments are Received if you use a Single Vendor Profile
Follow these procedures if you have decided to use Option #2, Accounting as Payments are Received with a Single Vendor Profile:
- As payments are received from clients for the Group, enter an invoice for the client for the amount received. Enter in the name of the Group in the Group field of the invoice. Set the Submit To to Supplier, and the Vendor is the single vendor or the vendor created specifically for the Group. Enter the amount collected from that client in the Total Fare and set the Commission to zero. Track the next payment due from the client through Trams Back Office by pressing <Alt-3>. Identify the next payment amount and due date in the Final Payment box. This is accessed in the Report Generator under Final Payment Report, FINL_Pay.rpt. After the invoice is entered, enter the client payment as usual and mark the invoice closed.
- When a refund to a client in the Group occurs, enter the refund invoice. Enter the name of the Group in the Group field of the invoice. Set the Submit To to Supplier, enter the amount to be refunded to that client in the Total Fare, and set the Commission to zero. After the refund invoice is entered, enter the Payment Made to the client as usual and toggle the refund invoice closed.
- At any point to see what has been received for the Group, select Reports|Client|Statement, set Report Type to Summary and Format to Group and enter the common Group name entered into each invoice in the Invoice Group field. If a different format is desired, reports can be designed using the Report Generator since invoices have been entered.
- At any point to see what future payments are due from clients, select Reports|Report Generator|Print Report|FINL-Pay.rpt. Enter the common Group name in the Group Invoice field and set the Final Pay Date From and To.
- As payments are sent to vendors for the Group, enter those payments under Payments|Made to the Group Vendor and create a voucher. (Do not MARK any invoices closed. Wait until Group is completed. When prompted for a client name, use the client profile created for the Group.) If multiple vendors are involved, enter the vendor name and any other payment remarks in the Remarks field. Also use the name on check field so the check prints to the actual vendor, and not Group vendor. Be sure to use only the one vendor profile built specifically for the Group.
- When payments are returned or refunded from vendors for the Group, enter those payments under Payment|Received from the Vendor created specifically for the Group. Close the vouchers, leaving the invoices open.
- At any point to see what was sent out for the Group as a whole, select Reports|Payments|Analysis. Set Profile Type to Vendor and print for the vendor profile built specifically for the Group. To see all payments for the Group both received and made, select Reports|Payments|Group Profit Analysis.
- Issue invoices for any ARC/BSP documents for the Group as you would for individual business, if payments are collected for the Group as the ARC/BSP documents are issued. If payments are not collected separately for these ARC/BSP documents, but instead paid from the payments subsequently collected to date, a refund invoice for the same amount must be entered at the same time the
- ARC/BSP invoice is entered. If this is the case, on the refund invoice set the Submit To to Supplier and use the vendor profile built specifically for the Group. Enter the amount of the ARC/BSP document in Total Fare and set the Commission to zero. This clears the client balance and offset the sales figures properly, which otherwise would have been doubled. (A zero payment is then entered for the client to mark the invoices closed.)
I• At any point to see what the profit on the Group is to date, print a Vendor Balance Report. The Balance Due column indicates the profit-to-date.
Application for Option #2 Accounting as Payments are Received if you Use Multiple Vendors
Steps for Accounting as Payments are Received if you use multiple vendors it will be the same as Accounting as Payments are Received if you use a single vendor with the exception of Step 4: As payments are sent out to vendors for the Group, enter those payments under Payments|Made. When prompted for a client name, use the corporate profile created for the Group.
Related Articles:
Groups in Trams Back Office: Part 1 – Setting Up Your Group
Groups in Trams Back Office: Part 2 – Handling Profiles for Groups
Groups in Trams Back Office: Part 4 - Closing a Group