Budget Billing Detailed Instructions

Budget Billing Instructions

Budget Billing is a recurring billing module that provides you the ability to set up a recurring periodic budget bill (installment) amount that is held in A/R for customers who want to pay a set monthly amount for products. When customers pay the agreed-upon monthly amount, it accumulates within the budget bill account and ultimately is applied against purchases.

To use Budget Billing, you must generate an item invoice. Currently, there are three methods you can use to generate an item invoice:

• Use INV > Invoices > Invoice Entry to generate a standard invoice entry.

• Use INV > Invoices > Automatic Invoices to create invoices from delivery tickets.

• From the Agris main menu, from the Reports menu, select Import Procedures to import invoice records. You can import Agris Energy, MAPS, Agrisource, and POS data.

The item invoice, with the corresponding budget bill transfer payment, is used to reconcile against the recurring budget bill invoices (actual usage vs. billed). Without item invoices (no usage) the reconcile process would generate a credit memo for the recurring billed amount.

Adding a budget billing agreement increases the customer’s A/R periodic billing amount total by the agreement periodic billing amount. When you close an agreement, a debit or credit (that reflects the difference between the amount used and what was paid on the recurring invoices) is sent to A/R. The periodic billing amount total is stored in the customer’s A/R balance record. Use A/R Balance Inquiry – Credit History to view the billing total and use the A/R Balance Reports to print the total.

Rules

ACR must be integrated with INV for the Budget Billing menu to appear.

You can only have one active agreement per item per customer. You must reconcile and close out the active agreement for an item before you can set up another agreement.

Keepfill modules do not create budget billing transactions.

Working with Budget Billing Agreements

Setup

Use ACR > Setup > General – Second window to specify a default invoice type and invoice terms for budget bill recurring invoices. You can assign these transactions a separate A/R GL number. You can also specify a default budget billing day of month and reconcile month for adding budget billing agreements.

You can set up different agreements with different billing days of the month and different reconcile months.

Budget Billing Options

Use ACR > Budget Billing Agreement > to add, view, or edit an agreement, and to reconcile or close out an agreement.

Adding an Agreement

• Use ACR > Budget Billing Agreement > Add an Agreement to detail the item, periodic billing amount, and length of the agreement.

• Use ACR > Budget Billing Agreement > Add an Agreement to enter the values for agreement location, agreement number, and inventory item. You cannot change these values after you save an agreement. You can also enter and edit values for agreement description (defaults to item description), periodic billing quantity, item price, item unit of measure, price unit of measure, tax rate, periodic billing amount, agreement date, billing start date, billing end date, billing day of the month (1-31), and reconcile month (0-12).

• The default value for Periodic Billing Amount is calculated from quantity, price, and tax rate. You may override the default.

• A reconcile month of 0 means that the agreement will never be automatically reconciled. You must manually reconcile this agreement.

• The budget bill agreement number is a new document number series. Use Customize > Document Numbers > ACR Budget Billing Agreements to maintain the agreement number.

• The customer is billed monthly, via a recurring invoice, for the budget bill amount set up in the agreement. Product purchases are processed normally, except that when purchases are invoiced, line items for which a budget billing agreement exists are automatically marked paid on the invoice. At the end of the agreement, the monthly (budget) billed invoices are compared to the purchases, and the difference is processed with a new invoice or credit memo.

• The budget bill recurring invoice and the budget bill automatic payment applied to item purchases are new document types. The recurring invoice’s document type is “7”, while the automatic budget bill payment’s document type is “W”. These document types are identified as “Budget Bill” in reports and on screen inquiries.

Budget Billing and Account Balance Inquiry

• A Budget Billed column has been added in Account Balance Inquiry, ACR > Account Balance Inquiry. This column displays the current budget billed balance. A positive balance indicates budget bill purchases exceed budget billed recurring charges. A negative balance indicates that recurring charges exceed actual purchases.

• When viewing the invoice list in Account Balance Inquiry, the “Description” column contains the Budget Bill Agreement Description. The invoice detail displays the document type as “Budget Bill”.

• When viewing the payments list in Account Balance Inquiry, the “Source” column contains “BUDGT BI”. The payment detail displays the Source Code as “Budgt Bill” and the check number contains the Budget Bill Agreement Location and Document number.

• Note: Budget Billing Balance has been added to Display Aged Balances and Account Balance Analysis. Verifying balances includes the budget billing balance.

Viewing an Agreement

• Use ACR > Budget Billing Agreement > View an Agreement, then click ACTUALS to view a list of transactions that affect that agreement.

Reconciling/Closing an Agreement

• Every time a recurring invoice is generated for an agreement, the reconcile month is checked. If the agreement is due to be reconciled, the reconcile process is automatically executed when the recurring invoice is generated. Reconciling an invoice in Budget Billing Maintenance performs the reconcile process manually.

• Use ACR > Budget Billing Agreement > Reconcile/Close an Agreement to display agreement information. A message appears requesting you to confirm that you want to manually reconcile this agreement. After reconciling you are then prompted to close the agreement. Select “Yes” to close the agreement, “No” to leave the agreement open.

• When you close an agreement, a debit or credit (that reflects the difference between the amount used and what was paid on the recurring invoices) is sent to A/R. The periodic billing amount total is stored in the customer’s A/R balance record. Use A/R Balance Inquiry – Credit History to view the billing total and use the A/R Balance Reports to print the total.

• A reconcile month of 0 means that the agreement will never be automatically reconciled. You must manually reconcile this agreement.

Budget Billing Forms

• Use ACR > Forms Manager > Budget Billing Form to design a customized agreement form.

Invoice Entry for Budget Billing

• Use INV > Invoices > Invoice Entry to generate an invoice for budget billing. When entering item invoices, for each invoice name id, the system:

• Identifies each line item that is under a budget billing agreement.

• Excludes budget billing line items identified in step 1 from discount calculations and prepayment applications.

• Displays the total budget billing charge amount as a credit toward the invoice amount.

• When the invoice is generated, the customer’s A/R budget billing balance at the agreement location is increased by the invoice amount.

Automatic Invoices

• Use INV > Invoices > Automatic Invoices to identify and transfer applicable budget billing line item charges to budget billing accounts receivable when creating automatic invoices from delivery tickets. Use this process to convert Agris Energy budget billing transactions into invoices.

Create Recurring Budget Billing Invoices

• Use ACR > Budget Billing > Recurring Invoices to generate recurring budget billing invoices based upon billing information established in budget billing agreement. This process includes automatically reconciling the budget bill agreement.

• You are prompted to create recurring invoices for the current date. Select “Yes” to automatically generate recurring invoices for all active budget bill agreements.

• Note: Create Recurring Budget Bill Invoices is a streamable process. If it is part of the stream, the confirmation prompt is skipped and invoices are created for the current processing date.

While creating a Recurring Budget Billing Invoices is one process, the system actually performs three steps: Build billing list, Determine billing amount, and Generate invoice.

1. Build Billing List: Generate the billing list by selecting active budget billing agreements that meet billing date or reconciliation date requirements.

2. Determine Billing Amount: The recurring invoice’s billing amount is calculated based upon the agreement’s periodic charge or automatic reconciliation.

   1. Period Charge: The invoice amount is set equal to the agreement’s periodic charge if the agreement is not scheduled for reconciliation. Periodic charges are not cumulative from the Last Bill Date.

   2. Reconciliation: If the agreement is selected for reconciliation, the invoice amount is calculated as the difference between the actual invoices (deliveries) and the recurring invoices.

3. Generate Invoice: A budget billing recurring invoice is generated for each entry in the billing list. The invoice description is set to the agreement description.

Note: Generating a recurring invoice updates the agreement’s Last Bill Date. If the agreement is reconciled, the Last Reconcile Date is updated instead of the Last Bill Date.

A recurring invoice reduces the customer’s A/R budget billing balance at the agreement location by the invoice amount. The customer’s unpaid invoice balance at the invoice location is increased by the invoice amount.

Reversing a Payment

• Use ACR > Payments/Prepayments > Reverse Payments/Applications to reverse a payment.

• Invoicing an item on a budget billing agreement creates an automatic Budget Bill Transfer payment for that line item. This payment is to offset the purchased item, and is compared against the recurring invoices when the agreement is reconciled.

• If a budget bill agreement has been reconciled since the date of the transfer, the transfer cannot be reversed or voided. Because a Budget Bill Transfer is considered a payment against the actual Item Invoice, it prevents reversing the item invoice if the transfer has been reconciled. If this situation arises, create a credit memo for the item invoice balance and apply it to the item invoice.

However, if the budget bill agreement has not been reconciled since the date of the transfer, the transfer may be voided. The transfer can only be voided because it is not yet a real payment. It is only a transfer designed to offset the delivered item, which will later be invoiced and reconciled.

Voiding the transfer will:

1. Increase the customer’s A/R invoice aging period balance at the invoice location by the transfer amount.

2. Reduce the customer’s A/R budget billing balance at the agreement location by the transfer amount.

If any line item on an invoice has a budget billed line item on it, the Reverse All applications of the Invoice option is not available. The budget bill transfer must be voided first.

Voiding Recurring Invoices

• Use ACR > Invoice Maintenance > Void Manual Invoices to void a recurring invoice.

• You can void a recurring invoice (generated automatically for budget billing agreements) if the invoice date is prior to or equal to the last reconcile date of the agreement. The budget billing A/R balance for the invoice Name Id at the agreement location is increased by the invoice amount.

Budget Billing and System Journal Interface

Setup

• Use SJI > System Accounts > Accounts Receivable to associate general ledger accounts with Budget Billing A/R transaction code.

• Budget Billing requires the use of a Budget Billing Delivered A/R ledger account. To properly map transactions to this account, a new transaction code, “BB”, has been created. Budget Bill Payments and Recurring Invoices post to the ledger account associated with the “BB” code. Within the transaction code selection list, “BB”, is listed as item 2.

A typical setup for budget bill system accounts would be:

Invoice Type GL Account

General A/R for Item Invoices: AR II 1120 – Accounts Receivable Trade

Budget Billing Delivered A/R: BB 1170 – payment on Item invoice f

Budget Billing Recurring A/R: AR BI 1180 -

Note: Budget Billing Recurring transactions can be mapped to General A/R account (1120). A separate account (1180) is not required for Budget Billing Recurring transactions.

Using

• Use SJI > Create System Entries > Accounts Receivable to incorporate Budget Billing transactions in the system entries process to generate general ledger journal entries.

• The following is a summary of the different budget billing transactions that create system entries. Transactions marked as new require mapping of the Budget Billing A/R account(s).

Item Invoice: Item Invoice transactions continue to generate ledger entries based on existing transaction qualifiers.

Debit Credit

Account Receivable (AR) Sales (SL)

Budget Bill Payment (New): The Budget Bill Payment is used to transfer invoice amounts of inventory items under a budget billing agreement to the budget billing receivable GL account. The transfer is created at invoice time by applying an automatic payment to a line item containing the budget billing inventory item. The payment is identified by a Cash Source code of “W”.

This transaction transfers the invoice line item amount (including tax) from the item invoice’s accounts receivable GL account to the budget billing receivable GL account assigned to the new “BB” transaction code.

The GL location for the Account Receivable account is the item invoice’s document location. The GL location for the Budget Bill Delivered Receivable is the budget billing agreement’s document location.

Budget Bill Recurring Invoice (New): A Budget Bill Recurring Invoice is generated every month for the billing amount defined in the budget bill agreement. The budget bill agreement’s document location is used as the document and GL location for this transaction. This transaction debits the Budget Billing Recurring Receivables GL account and credits the Budget Billing Delivered GL account. The budget bill recurring invoice is identified as an Accounts Receivable record with Document Type equal to “7”.

The value of the Budget Billing Delivered GL account (“BB” account) is an indicator of the condition of the budget billing program. A negative value indicates recurring invoices are exceeding actual budget bill purchases (deliveries), thus you need to lower the budget billing agreement usage estimates and monthly billing amounts. A positive amount indicates that actual budget bill purchases (deliveries) are exceeding the budget bill agreement usage estimates and monthly billing amounts, thus you may need to increase the budget bill agreement usage estimates and monthly billing amounts.

Debit Credit

Budget Bill Recurring Receivable (AR - 1180) Budget Bill Delivered Receivable (BB - 1170)

Payment on Recurring Invoice: Payment transactions continue to generate ledger entries based on existing transaction qualifiers.

Payment Received/Applied

Debit Credit

Bank (PM) Budget Bill Recurring Receivable (AR - 1180)

Prepayment Applied

Debit Credit

Prepayment Account (PP) Budget Bill Recurring Receivable (AR - 1180)

Budget Bill Reconcile Invoice / Credit Memo (New): The Budget Bill Reconcile Invoice/Credit Memo is a recurring invoice that is generated during reconciliation. An invoice or credit memo is generated if there is a difference between the customer’s actual budget bill purchases and the recurring budget bill invoices since the last reconciliation. If purchases exceed recurring then an invoice is generated. If recurring invoices exceed purchases than a credit memo is generated. The document location and GL location are the budget billing agreement location. After reconciliation, the Budget Bill Delivered Account balance is zero.

Invoice Entry

Debit Credit

Budget Bill Recurring Receivable (AR - 1180) Budget Bill Delivered Receivable (BB - 1170)

Credit Memo Entry

Debit Credit

Budget Bill Delivered Receivable (BB - 1170) Budget Bill Recurring Receivable (AR - 1180)

Reverse Un-Reconciled Budget Bill Payment (New): Reversing a Budget Bill Payment that has not been reconciled creates a voided payment. A payment is considered un-reconciled when its payment date is after the budget bill agreement’s last reconciliation date. In this situation, the reversing process just voids the original transaction. The voided transaction credits the Budget Billing Delivered Receivable GL account using the budget bill agreement’s document location as the GL location, and debits the Account Receivable GL account of the original item invoice. The debit entry uses the invoice location as the GL location.

Debit Credit

Account Receivable (AR - 1120) Budget Billing Delivered Receivable (BB - 1170)

** Because a Budget Bill Transfer is considered a payment against the Actual Item Invoice, it will prevent reversing the item invoice if the transfer has been reconciled. In this situation, you should create a credit memo for the item invoice balance and apply it to the item invoice.

Reverse Un-Reconciled Budget Bill Recurring Invoice (New): A recurring invoice can be reversed if it has not been reconciled. A recurring invoice is considered un-reconciled when its invoice date is after the budget bill agreement’s last reconciliation date. The reversal transaction credits the Budget Bill Recurring Receivable GL account and debits the Budget Billing Delivered Receivable GL account. The document and GL locations are set to the recurring invoice’s document location.

Debit Credit

Budget Bill Delivered Receivable (BB - 1170) Budget Bill Recurring Receivable (AR - 1180)

** Reconciled Recurring Invoices cannot be reversed or voided. In this situation, you can issue a credit memo and leave it unapplied.

Document written by A. Mueller, adapted by S. Pykare