Enhanced Revenue Recognition Method (ERRM) Overview

Enhanced Revenue Recognition

If you decide you want to switch your system of Accounting to ERRM, you will receive the following information in a checklist via fax or email. You will be required to read, sign and date this document to certify that you understand the procedural changes that accompany ERRM.

CAUTION: ERRM cannot be uninstalled. Once this process has been effected, the only method of reversal is to restore a backup prior to installation.

Significant Modifications

Order Entry

When a line in Order Entry is changed from a Reserved status to a Cut status, the Inventory record remains in a Reserved status.

A Picking Ticket is required for each order. When the Picking Ticket is printed the customer order lines are changed from a Cut status to a Staged status. The Inventory record, however, remains in a Reserved status.

A Delivery Ticket is required for each order. When the Delivery Ticket is printed, order lines are then changed from a Staged status to a Delivered status. At this time, the Inventory record is changed from Reserved to Used.

Journal Entries are immediately made.

There are now 3 required order processes:

• Bill

• Book

• Job Cost

Billing an order allows you to create an invoice in Accounts Receivable Aging. A Bill Date is posted on the customer order and journal entries are immediately made. Before Booking an order, all lines must be in a Delivered status and provider records have to be posted and balanced. Journal entries are immediately made.

Journal Transactions

With each A/P record posted, journal entries are immediately made. All A/P edits, voids, and payments will make individual journal entries. All banking transactions, including Receipts for Deposits will make individual journal entries. Finance Charges posted and unposted will make individual journal entries. Inventory received via Bill of Lading will be accrued to Inventory In Uncosted. When costing inventory individual journal entries are made. Printing the Delivery Ticket in Order Entry will make individual journal entries. Changing the status of the line from Delivered to None, Cut or Reserved makes individual journal entries. Posting Provider Records in Order Entry or from Schedule Pro will accrue to Accrued Labor. Editing the Install Date on the Provider Record will make individual journal entries. Changing the dollar amount on a Provider Record will make individual journal entries. Deleting a Provider Record will make individual journal entries. Posting payments to customer orders will make individual journal entries.

Accounting

Once an order has been Billed in Order Entry, statements can be printed. Due to in‐depth journal posting, your journal report will increase in size considerably. You will still have the option to save the Journal report as a CSV file or a PDF to prevent excessive printing. Turning on the switch for ERRM will flag each record entered thereafter to be treated as an Enhanced Revenue Recognition order. Transactions made prior to the ERRM switch is turned on will be treated as they were previously and month‐end summaries for those transactions will be posted to the journal at month‐end. Sales tax and Use tax will be posted to the Sales & Use Tax Report at the time the sale is Booked. Sales Tax and Use Tax are not accrued.

Sales Reports

Booking an order in Order Entry puts a Delivery Date on the order. Therefore, all sales reports that look for the Delivery Date as a parameter will pick up all booked orders instead of Job Costed as prior to the ERRM switch.

Other

There are several other changes that you will notice in your RFMS system upon implementation of Enhanced Revenue Recognition.

All A/P records are posted individually to the Journal as you enter the records. This is also applicable to Banking transactions.

When you Post/Unpost Finance Charges, individual Journal records are posted instead

of a month-end lump sum entry.

When Viewing your Journal (Accounting, File, General Ledger, View Journal) you can now search journal detail information by:

• Supplier
• Invoice Number
• Line Number
• Provider
• Job Name
• Purchase Order
• Roll/Item #
• Item Sequence #
• BOL (Bill of Lading)