Configure a list of income charges and parameters in the system. The charges are used in AR transactions and reporting to identify specific income sources tied to accounting GL natural accounts.
Navigation
1. From the homepage, go to Finance module.
2. Navigate to the Accounts Receivable and Charge Type.
Guide
1. Click the Create New button.
2.
4) Enter the following fields:
Charge Type Name: Enter “Project Charges”
Business Entity: Select “COOLSG – Cool Company (SG)”
Cost Centre: Select “GEN – General Cost Centre”
Natural Account: Select “4200 – Project”
Activity: Select “000 – All Projects”
Output Tax Code: Select “GST”
5) Click “Save and New”.
6) To create another charge type enter the following fields:
Charge Type Name: Enter “PS Charges”
Business Entity: Select “COOLSG – Cool Company (SG)”
Cost Centre: Select “GEN – General Cost Centre”
Natural Account: Select “4300 – Professional Services”
Activity: Select “000 – All Projects”
Output Tax Code: Select “GST”
7) 5) Click “Save and Exit."
GL Account Segments
The System allows users to pre-define the following GL Account Segment that is associated with each Income Charge Type. Apart from the Natural Account segment, any GL Segment (Business Entity, Cost Center, Activity) does not need to be pre-defined in AR Charge Type settings, as charges are often associated with each transaction on a case to case basis (e.g. Any Business Entity can charge an “Administrative Fee”, and book the revenue under any Cost Center and Activity the income arises from).
Once the GL Account Segment is set for any Charge Type, the System will automatically filter the relevant Charge Type in all AR Transactions for a given Business Entity, and any AR Charge Type selected by users will populate the associated GL Account Segment(s) or GL Account.
Additional Charge Type Flags
Options |
Description |
Effect & Implication |
|---|---|---|
Full Payment Required |
Whether full payment is required at Collection |
System will not allow partial payment of such charge item. Full payment is required to clear the outstanding. |
This is a Deposit Charge Type |
Whether it is a deposit charge |
If the charge is a deposit, system shall have special handling to track the AR Deposit Sub-ledger and when such deposit credit can be made available for use (e.g. only when amount has been collected). |
This is an Interest Charge Type |
Whether it is an interest or interest-related charge |
If the charge is an interest or interest-related charge, such charges are often excluded from the computation of late payment interest/ penalty to prevent compounding of interest on interest (which may be against statutory guideline or law in some countries). |
Knock-Off Sequence
The System allows users to set the priority on the appropriation of funds collected towards outstanding charge. Typically, System allows Users to set up to 2 knock-off application orders namely the “Primary Order Number” and the “Secondary Order Number”.
Both Primary Order Number and Secondary Order Number are used in the ordering of outstanding items for auto knock-off during collection from customer or during system auto-offset by credits.
The funds application rules follow the following order (“Knock-off Sequence”):
- Primary Order Number – By ordering number, in ascending sequence, followed by;
- Document Date – By Date (First-In-First-Out (FIFO)), in ascending sequence, followed by;
- Secondary Order Number – By ordering number, in ascending sequence.
Notes
If an outstanding item is not represented by an AR Charge Type, it will have last priority in the Knock-off Sequence. Configure references required for each payment mode created.
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