Auto Bill Recurring Revenue

This Help File Page was last Modified on 02/17/2019

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Auto Bill Recurring Revenue

This Help File Page was last Modified on 02/17/2019

One of the most powerful features in the MKMS Accounts Receivable module is the automation of Recurring Revenue Billing.

Also see thee Fully Automated Recurring Billing chapter for information on that feature.

 

Setup Requirements - To automate Recurring Revenue Billing:

Create the Sale-Purchase Items for the types of Recurring Revenue related services that you provide.

These are called the Recurring Revenue Sales Category Codes.

Identify the Pay Groups which will be used to establish the normal rates for the Recurring Revenue related services you provide.

Enter the Auto Bill Definitions for each Subscriber who is to be billed automatically for that Recurring Revenue.

 

Multiple Billing Cycles - If you plan on doing Recurring Revenue billing using the Recurring Billing Cycles feature (where different Groups of Subscribers may be billed on different Dates throughout the same month):

1.The Bill Recurring Revenue in Cycles option must be Checked on the Invoice/Proposal sub-tab on the Company Options tab of the User Options Form

2.The required Recurring Billing Cycles groups must be defined.

3.Identify the Pay Groups which will be used to establish the normal charges for the Recurring Revenue related services that your Company provides.

4.Create the Sale-Purchase Items for the types of Recurring Revenue related services that your Company provides.

a.These special Sale-Purchase Items are explained the Defining Recurring Revenue Sales Category Codes chapter.

5.Enter the Auto Bill Definitions for each Subscriber who is to be billed automatically for that Recurring Revenue.

 

Billing Recurring Revenue

To open the Auto Billing Form:

a)From the Backstage Menu System Select File and Choose Receivable and Select the Run Automatic Billing option, or

b)From the Quick Access Menu, Select File and Choose Receivable and Select the Run Automatic Billing option, or

c)Within the Receivables Tab on the MKMS Desktop, Click the Auto Bill Icon.

 

For General Ledger System Users -

Note: Also see the "Special Recurring Billing Information for General Ledger System Users" discussion at the end of this chapter.

 

a.The Gross Amount (including Sales Tax, if charged) of each Recurring Revenue Sale is Debited (added) to the Accounts Receivable Asset Account (a Mandatory Account).

 

b.If Earned and Deferred Revenues is being tracked:

i.The Net Amount (not including any Sales Tax) is Credited (added) to the associated Deferred Revenue Liability Account

ii.If Sales Tax was charged, the Amount of that sales tax is Credited (added) to the appropriate Sales Tax Payable Liability Account (i.e., Local, National, or both, as needed).

iii.Then, once each month, the Post Earned Revenue dialog is used to calculate the Earned Recurring Revenue for a selected Accounting Period. where

iv.The Deferred Revenue Liability Account is Debited (reduced) by the Value of the Recurring Revenue that was Earned during the Accounting Period

v.The Sales Account assigned to the Recurring Revenue Item is Credited (increased) by the Value of the Recurring Revenue that was Earned during the Accounting Period

vi.The Current Earnings Equity Account (a Mandatory Account) is Credited (increased) by the Value of the Recurring Revenue that was Earned during the Accounting Period

vii.The Earnings Posting Expense Account (a Mandatory Account) is Debited (increased) by the Value of the Recurring Revenue that was Earned during the Accounting Period

 

c.But, if Earned and Deferred Revenues is not being tracked:

i.The Net Amount (not including any Sales Tax) is Credited (added) to the associated Sales Account (assigned to that Recurring Revenue Item).

ii.If Sales Tax was charged, the Amount of that sales tax is Credited (added) to the appropriate Sales Tax Payable Liability Account (i.e., Local, National, or both, as needed).

iii.The Net Amount (not including any Sales Tax) is Credited (added) to the Current Earnings Equity Account (a Mandatory Account).

iv.The Net Amount (not including any Sales Tax) is Debited (added) to the Earnings Posting Account (a Mandatory Account).

 

A.Auto Billing (Multiple Recurring Revenue Billing Cycles are not implemented):

Also see the "B. Auto Billing (When Multiple Recurring Revenue Billing Cycles are implemented)" discussion below

 

HelpFilesAutoBillingProcedureNoBillingCycles

Auto Billing dialog - Recurring Billing Cycles are not implemented

 

In Company Settings, if the UseSubscriberTerms option is set to True ("T"), no Due Date will be required because each Subscriber's Terms (and therefore their Due Date ) may be individually set.

See Setting the Due Date for more information.

 

HelpFilesAutoBillingProcedureNoBillingCycles-NoTerms

Auto Billing dialog -

Recurring Billing Cycles are not implemented

Individual Subscriber Terms are implemented

 

Completing the Auto Billing Form:

Period To Bill - Use the Drop-Down Selection List es provided to enter this information.

 

HelpFilesAutoBillingPeriodToBillNoBillingCycles

 Period To Bill

 

Year - By default, it will be the current Year unless this is the last month of the Year, in which case the following Year will be offered.

oIf appropriate, use the Drop-Down Selection List provided to Choose a different Year for this billing.

Month -By default, it will be the Month following the current Month.  Enter the appropriate month for this billing.

oIf appropriate, use the Drop-Down Selection List provided to Choose a different Month for this billing.

Note: Recurring Revenue is batched, tracked and stored within MKMS by the Year and Month entered here.

 

Last 20 Periods Billed - Initially, this will be blank (only zeros displayed).  

The first time you bill for your Recurring Revenue, and each time thereafter, the Month and Year that was billed will be stored.

The Cycle column always reads "Standard".

A maximum of the Last 20 Periods Billed will be displayed.

Thereafter, the most recent 20 Periods Billed are saved and the oldest (the 21st) is discarded.

 

HelpFilesAutoBillingPeriodSale&DueDates

   Sale & Due Dates

 

Sale Date - By default, Today will be entered as the Sale Date.

When required, a different Sale Date may be entered using the Drop-Down Calendar/Date Entry field provided

a)Click on the Date field and type the desired Date using a MM/DD/YYYY format; or

b)Use the Drop-Down Calendar/Date Entry field provided to Choose the desired Date

oThis Sale Date will appear on the Invoices generated with this Auto Billing process.

However, the system will stop a User from running the Auto Bill Recurring Revenue process when (if) the wrong Sale Date is selected.

oThis is done by checking whether or not your Company bills their Recurring Revenues in Advance [e.g., whether the Company Setting option "BillInAdvance" is set to True ("'T") or False ("F")' ].

a)If Bill in Advance is set to True, the Sale Date must be within the month prior to the Month and Year selected as the Period To Bill.

 

HelpFilesAutoBilling-DateWrong-AreBillIngInAdvance

 

b)If Bill in Advance is set to False, the Sale Date must be within the same Month and Year selected as the Period To Bill.

 

HelpFilesAutoBilling-DateWrong-NotBillIngInAdvance

 

Due Date - In Company Settings, if the UseSubscriberTerms option is set to True ("T"), no Due Date will be required because each Subscriber's Terms (and therefore their Due Date ) may be individually set for each Subscriber, otherwise a Due Date must be specified.  See Setting the Due Date for more information.

If required (i.e., the Due Date field is displayed):

oBy default, this Due Date will be set based on the Sale Date entered above and your Company's Terms set in Company Options.  

oYou may enter a different Due Date using the Drop-Down Calendar/Date Entry field provided

 

Run - Click the Run button to execute the Auto Billing process.

 

HelpFilesAutoBillingProcedureNoBillingCyclesRunButton

Auto Billing dialog - Run option

 

 

Note: An AutoBill.log Notepad file is created in the \MKS\MKMS folder and records the setup entries, number of Recurring Revenue items that were pre-processed, the number that were completed, and notes an errors including Service Address information and the RRID if an Invoice could not be generated.

Once the billing options have been chosen and the Run button Clicked, a Confirmation dialog will be presented.

 

HelpFilesAutoBillConfirmAutoBilling

 

oNo - Click the No button to return to the Auto Billing Form and reset/correct the Auto Billing options.

oYes - Click the Yes button to execute the auto billing process.

 

For General Ledger System Users who are tracking Earned and Deferred Revenue, an Unearned Revenue GL # (i.e., Deferred Revenue General Ledger Liability Account) should be identified in the associated Recurring Revenue Sale-Purchase Item record.

 

HelpFilesAutoBillGeneralLedgerGLAccount

Sale-Purchase Item Form - Item section = Unearned Revenue GL #

 

Sale Item Check (Auto Billing) - When the Auto Billing procedure is started, each Recurring Revenue (Auto Billing) record is examined to ensure each has the an Unearned Revenue GL # General Ledger Account assigned to the associated Recurring Revenue Sale-Purchase Item.

oIf one or more Auto Billing records are found to not have the recommended Deferred Revenue General Ledger Liability Account identified, an Unassigned Sale Items (Deferred Revenue) dialog will be displayed.

oIf Unearned Revenue (Deferred Revenue) is not being tracked, no action is required so Click the Close Icon.

oOtherwise, if Unearned Revenue (Deferred Revenue) is being tracked:

 

HelpFilesUnearnedRevenueAccountNumberMissing

 

oSaleItemID - This is the Sale-Purchase Item record that is missing the appropriate General Ledger Unearned Revenue Account assignment.

oDescription - This is the default Description of the Recurring Revenue Item.

oGL Number - Enter the GL Number column of the selected Unassigned Sale Item record: using the Drop-Down Selection List provided, Choose the appropriate Deferred Revenue General Ledger Liability Account for that Sale Item ID.  Repeat this process, as needed.

oSet All - If all of the listed Unassigned Sale Item records should be assigned the same Deferred Revenue General Ledger Liability Account:

oClose - Click the Close Icon when finished (or no Unearned Revenue tracking is being implemented).

The Auto Billing process will continue automatically.

 

For General Ledger System Users - When a Recurring Revenue Item is billed automatically:

a)In all cases, the Gross Amount (including Sales Tax, if charged) of each Recurring Revenue Sale is Debited (added) to the Accounts Receivable Asset Account (a Mandatory Account).

b)If Earned and Deferred Revenues is being tracked:

i.The Net Amount (not including any Sales Tax) is Credited (added) to the associated Deferred Revenue Liability Account

ii.If Sales Tax was charged, the Amount of that sales tax is Credited (added) to the appropriate Sales Tax Payable Liability Account (i.e., Local, National, or both, as needed).

c)If Earned and Deferred Revenues is not being tracked:

i.The Net Amount (not including any Sales Tax) is Credited (added) to the associated Sales Account (assigned to that Recurring Revenue Item).

ii.If Sales Tax was charged, the Amount of that sales tax is Credited (added) to the appropriate Sales Tax Payable Liability Account (i.e., Local, National, or both, as needed).

iii.The Net Amount (not including any Sales Tax) is Credited (added) to the Current Earnings Equity Account (a Mandatory Account).

iv.The Net Amount (not including any Sales Tax) is Debited (added) to the Earnings Posting Account (a Mandatory Account).

Close - Click the Close HelpFilesCloseBoxbox at the top right of the Form to exit the Auto Billing Form.

 

B.Auto Billing (When Multiple Recurring Revenue Billing Cycles are implemented):

 

HelpFilesAutoBillingProcedure

Auto Billing dialog - Multiple Recurring Billing Cycles are implemented

 

In Company Settings, if the UseSubscriberTerms option is set to True ("T"), no Due Date will be required because each Subscriber's Terms (and therefore their Due Date ) may be individually set.

See Setting the Due Date for more information.

 

HelpFilesAutoBillingProcedure-NoDueDate

Auto Billing dialog -

Multiple Recurring Billing Cycles are implemented

Individual Subscriber Terms are implemented

 

Completing the Auto Billing Form:

Period To Bill - Use the Drop-Down Selection List es provided to enter this information.

 

HelpFilesAutoBillingPeriodToBill

Period To Bill

 

Year - By default, it will be the current Year unless this is the last month of the Year, in which case the following Year will be offered.

oIf appropriate, use the Drop-Down Selection List provided to Choose a different Year for this billing.

Month -By default, it will be the Month following the current Month.  Enter the appropriate month for this billing.

oIf appropriate, use the Drop-Down Selection List provided to Choose a different Month for this billing.

Cycle - If the Bill Recurring Revenue in Cycles optional feature has been implemented, use the Drop-Down Selection List provided to Choose the appropriate Recurring Billing Cycle for this Auto Billing process.

Note 1: Recurring Revenue is batched, tracked and stored within MKMS by the Year, Month and Recurring Billing Cycle entered here.

 

Last 20 Periods Billed - Initially, this will be blank (only zeros displayed).

The first time you bill for your Recurring Revenue, and each time thereafter, the Month & Year, and the selected Billing Cycle will be stored.

A maximum of the Last 20 Periods Billed will be displayed.

Thereafter, the most recent 20 Periods Billed are saved and the oldest (the 21st) is discarded.

 

HelpFilesAutoBillingPeriodSale&DueDatesM

Sale & Due Dates

 

Sale Date - By default, Today will be entered as the Sale Date.

When required, a different Sale Date may be entered using the Drop-Down Calendar/Date Entry field provided

a)Click on the Date field and type the desired Date using a MM/DD/YYYY format; or

b)Use the Drop-Down Calendar/Date Entry field provided to Choose the desired Date

oThis Sale Date will appear on the Invoices generated with this Auto Billing process.

However, the system will stop a User from running the Auto Bill Recurring Revenue process when (if) the wrong Sale Date is selected.

oThis is done by checking whether or not your Company bills their Recurring Revenues in Advance [e.g., whether the Company Setting option "BillInAdvance" is set to True ("'T") or False ("F")' ].

c)If Bill in Advance is set to True, the Sale Date must be within the month prior to the Month and Year selected as the Period To Bill.

d)If Bill in Advance is set to False, the Sale Date must be within the same Month and Year selected as the Period To Bill.

 

Due Date - In Company Settings, if the UseSubscriberTerms option is set to True ("T"), no Due Date will be required because each Subscriber's Terms (and therefore their Due Date ) may be individually set for each Subscriber, otherwise a Due Date must be specified.  See Setting the Due Date for more information.

If required (i.e., the Due Date field is displayed):

oBy default, this Due Date will be set based on the Sale Date entered above and your Company's Terms set in Company Options.  

oYou may enter a different Due Date using the Drop-Down Calendar/Date Entry field provided

 

Run - Click the Run button to execute the Auto Billing process.

When the General Ledger System is in use, a Warning Message will be presented if a Recurring Revenue Sale-Purchase Item would be billed without an Unearned Revenue General Ledger Account Number assigned to that Sale-Purchase Item.

If the Period To Bill selection has al;readyh been Run, an Information message will be displayed

 

HelpFilesThisPeriodHasAlreadyBeenBilled

 

If the Period To Bill selection appears to skip one or more Recurring Billing Cycles, a warning message will be displayed.

 

HelpFilesAutoBillMissingBillingPeriodWarning

Auto Bill Missing Billing Period Warning Message

 

Once the billing options have been chosen (and there are no Milling Billing Period issues) and the Run button is Clicked, a Confirmation dialog will be presented.

 

HelpFilesAutoBillConfirmAutoBilling

Confirm Auto Billing dialog

 

In either case (Missing data or Confirmation request):

No - Click the No button to return to the Auto Billing Form and reset/correct the auto billing options.

Yes - Click the Yes button to execute the auto billing process.

For General Ledger System Users who are tracking Earned and Deferred Revenue, an Unearned Revenue GL # must be identified in the associated Recurring Revenue Sale-Purchase Item record.

 

HelpFilesAutoBillGeneralLedgerGLAccount

Sale-Purchase Item Form - Unearned Revenue GL #

 

When the Auto Billing procedure is started, each Recurring Revenue (Auto Billing) record is examined to ensure each has the an Unearned Revenue GL # General Ledger Account assigned to the associated Recurring Revenue Sale-Purchase Item.

oIf one or more Auto Billing records are found to not have the recommended Deferred Revenue General Ledger Liability Account identified, an Unearned Revenue - Sale Items dialog will be displayed.

 

HelpFilesUnearnedRevenueAccountNumberMissing

 

oSaleItemID - This is the Sale-Purchase Item record that is missing the appropriate General Ledger Unearned Revenue Account assignment.

oDescription - This is the default Description of the Recurring Revenue Item.

oGL Number - Enter the GL Number column of the selected Unassigned Sale Item record: using the Drop-Down Selection List provided, Choose the appropriate Deferred Revenue General Ledger Liability Account for that Sale Item ID.  Repeat this process, as needed.

oSet All - If all of the listed Unassigned Sale Item records should be assigned the same Deferred Revenue General Ledger Liability Account:

oIf Unearned Revenue (Deferred Revenue) is not being tracked, no action is required so Click the Close Icon.

oClose - Click the Close Icon when finished (or no Unearned Revenue tracking is being implemented).

 

For General Ledger System Users - When a Recurring Revenue Item is billed automatically:

The Auto Billing process will continue automatically.

 

HelpFilesAutoBillingProcedureCompleted

Auto Billing dialog - Process completed - Close option

 

When the process is completed, Click the Close HelpFilesCloseBoxbox at the top right of the Form to exit the Auto Billing Form.

 

Special Recurring Billing Information for General Ledger System Users

For General Ledger System Users - When a Recurring Revenue Item is billed automatically:

In all cases, the Gross Amount (including Sales Tax, if charged) of each Recurring Revenue Sale is Debited (added) to the Accounts Receivable Asset Account (a Mandatory Account).

1.If Earned and Deferred Revenues is being tracked:

a.The Net Amount (not including any Sales Tax) is Credited (added) to the associated Deferred Revenue Liability Account

b.If Sales Tax was charged, the Amount of that sales tax is Credited (added) to the appropriate Sales Tax Payable Liability Account (i.e., Local, National, or both, as needed).

2.If Earned and Deferred Revenues is not being tracked:

a.The Net Amount (not including any Sales Tax) is Credited (added) to the associated Sales Account (assigned to that Recurring Revenue Item).

b.If Sales Tax was charged, the Amount of that sales tax is Credited (added) to the appropriate Sales Tax Payable Liability Account (i.e., Local, National, or both, as needed).

c.The Net Amount (not including any Sales Tax) is Credited (added) to the Current Earnings Equity Account (a Mandatory Account).

d.The Net Amount (not including any Sales Tax) is Debited (added) to the Earnings Posting Account (a Mandatory Account).

 

However, the question is:

When is the Recurring Revenue Earned for the First Month of the Period of Service being billed, and when is that First Month's Recurring Revenue Deferred to the next Month?

a)When the Auto Billing Sale Date entered is within the First Month of the Period of Service being billed, and the Starting Day - which is identified in the Billing Cycle record - is the First day (i.e., '1') of the Month and Year of the Period To Bill chosen in the Auto Billing dialog, the First Month is Earned and posted on the last day of that First Month using Post Deferred Revenue procedure);

b)Otherwise, that First Month's Recurring Revenue is Deferred until the next Month as described below (these are the only other possible cases):

i.The Auto Billing Sale Date entered is dated within the Month before the First Month of the Period of Service being billed (i.e., your Company Bills in Advance) and the Starting Day - which is identified in the Billing Cycle record - is the First day (i.e., '1') of the Month and Year of the Period To Bill chosen in the Auto Billing dialog, therefore the Recurring Revenue is Deferred to the next Month after Sale Date (which in this case is actually the First Month of the Period of Service being billed);

ii.The Auto Billing Sale Date entered is dated on or after the First day of the First Month of the Period of Service being billed, but the Starting Day - which is identified in the Billing Cycle record - is Not the First day (e.g., it is 2...31) of the Month and Year of the Period To Bill identified in the Auto Billing dialog, so the Recurring Revenue for this First Month of the Period of Service being billed will not be fully earned until the next Month, therefore the Earned Recurring Revenue for this First Month is Deferred to the next Month.

c)Earned Revenue is always posted to the General Ledger System  - using the Post Earned Revenue process - on the Last Day of the selected Month being posted, whether that process is run at the end of the Month and Year being posted, or in a subsequent (later) Month.