System Parameters | Accounting tab

This document will explain the features and functions of the Accounting Tab under System Configuration within Parameters.

Topics in this article include

• Here's how to get there

• General Accounting Area

• Review Before Billing Area

• Finance Charges Area

• Discount Area

• Depreciation Area

• Adjustment Area

Here's how to get there

Expert: Program Menu > Configuration > System Configurations > Parameters
Elite: Configuration Gear > App Configurations > Parameters

If you are a multi-store operation, you will need to select your desired store before moving forward. Once you're in Parameters select the Accounting tab.

General Accounting Area

Accounting Method - This parameter selects the method that will be used to determine when income is posted to the totals. You cannot change this parameter directly: in order to change it you must run the Change Accounting program.

Cash Method - This method means contracts are not posted to income until they are fully paid. This method is only available if you were previously on Expert and migrated to Elite. Otherwise, this option is not available.
 

Note: The following restrictions apply to Cash Accounting only:
 

1. Any payment or partial payment of an Open or Reservation contract will not be recognized as a sale until the contract is closed and paid in full.

2. “Charge by default” contracts for cash customers will not be recognized as a sale until the full payment is received for the contract. If the “charge by default” occurs upon the return of the items (i.e. unpaid overtime) the entire contract amount will be subtracted from the current day’s sales. It will be added back in when full payment is received.

Open Accrual Method - This method means contracts are posted to income upon opening the contract (Reservation depends on the “Bill these contract status” parameter).
 

Closed Accrual Method - This method means contracts are not posted to income until the contract is closed (all items are returned).
 

The first month of the fiscal year - This parameter is used in the Calendar program as well as the Comparatives total. Select the first month of your fiscal year from the pull-down menu.
 

First day of Work Week - This parameter is used in the Time Clock program. This day is used for the default starting day of the Time Clock Report, as well as the weekly totals on time clock entry and inquire. Select the first day of your workweek from the pull-down menu.
 

Store Tax Code - This parameter specifies the tax jurisdiction in which your store is located and thus defines the default tax rates to be charged. This tax jurisdiction must be defined in the Tax Table.
 

Allow Tax Exempt Selection - Checking the box for this parameter means that a customer contract can be marked as tax-exempt by simply selecting Tax Exempt or by checking the Tax-Exempt box under the information tab in contract processing. Unchecking the box means that a customer contract can be set to tax-exempt by selecting a tax jurisdiction that is set up to not charge tax. This option is used if you need to break out the tax-exempt contracts by type of tax exemption such as resale, far, government, etc.
 

Bill these contract status(es) - This parameter defines when to bill contracts on statements as follows:
 

• Bill for closed contracts only
• Bill for open and closed contracts only
• Bill for all contracts (Reservation, Open, Closed)

If you are using open accrual income accounting, billing for “Closed contracts only “or “Open and Closed” contracts only causes income for Reservation contracts to be delayed until the contract is opened or canceled. Billing for Reservations will cause income to be reported at the time the reservation contract is written.
 

Customer Balance included status(es) - This parameter defines which contract status(es) are included in the customer’s current balance. The current balance is used for credit limit checking (Closed, Closed & Open, Closed, Open & Reservation, Open, Open & Reservation, and None (External Balance Only).

Include External Receivable Balance - This option can also be used if you maintain an external receivable balance in a third-party program. When checked, the external balance will be calculated with the contract options in the custom balance included options to display the customer balance and check the credit limit of the customer when writing a contract. To use this, you must be using the Point of Rental API and feeding the external balance value into the database. It cannot be manually populated.

Inventory Cost Method - This parameter selects the method used to allocate cost on resale inventory.
 

• First in, First Out means that the resale inventory received first is sold first. In other words, the oldest inventory is sold. This is the standard setting for most rental stores.
• Last in, First Out means that the resale inventory just received is sold first. In other words, the newest inventory is always sold, and the oldest inventory is never sold unless you sell everything.

Capitalize Extra Charges - This parameter is used to define whether extra charges within an item record are capitalized with the purchase price.
 

If you use the Purchase Order module - The shipping charges, tax, and miscellaneous charges are automatically entered in the inventory item’s Extra Charges field. These charges will be distributed over all items on the Purchase Order, this includes non-inventory items. If you do not want the extra charges to be allocated to the non-inventory items, you will need to receive the inventory items and add all of the extra charges, save through, then modify the Purchase Order and add the non-inventory items.

If you are not using the Purchase Order module - You will have to manually add amounts to the Extra Charges field. If you capitalize extra charges then shipping, taxes, and miscellaneous charges will be charged to your asset account and not expenses.
 

Include Extra Charges in Inventory - This parameter is used to define whether extra charges within an item are included in your rental/sales/parts Inventory Value.
 

If you use the Purchase Order module - This is an Elite Only setting. The shipping charges, tax, and miscellaneous charges are automatically entered in the inventory item’s Extra Charges field. These charges will be distributed over all items on the Purchase Order; this includes non-inventory items. Suppose you do not want the extra charges allocated to the non-inventory items. In that case, you will need to receive the inventory items, add all the additional charges, save through, then modify the Purchase Order and add the non-inventory items. 

Additionally, if you would like to exclude sales tax from the charges that contribute to inventory value, enable the configuration below under the System section of browser configurations. This is a company-wide setting. 

To get there, go to the Gear icon > Browser Security > System

If you are not using the Purchase Order module - You will have to manually add amounts to the Extra Charges field. If you include extra charges, then shipping, taxes, and miscellaneous charges will be charged to your asset account and not expenses.
 

Default Rental Period - This parameter sets the default rental period when opening a new contract. If this option is set to anything greater than 0, it will override the minimum rate in the item record as being the default time.
 

Income Percentage used for ROI call - Percentage of income counting toward the ROI calculations minus the percentage of overhead associated with your items. This will provide a truer number of what the net return was on that investment.
 

Transfer Serialized Sales Inv. Value - Checking this parameter option will transfer the value of a serialized sales item along with it to the designated store.
 

Transfer Serialized Rental Inv. Value - Checking this parameter option will transfer the value of a serialized rental item along with it to the designated store.


Use Sequential Invoice Number - Turning on this option will generate a unique invoice number when a contract is posted.  Save Closed Adjustments for Closed Account and Closed Cash modifications will automatically be turned on. You will be unable to turn off these options while this option is enabled.

 

Review before Billing Area

With one of these parameter boxes checked, invoices for contracts connected to this setting will not be sent out through mass\fax\email until someone goes through and reviews them. For more details, click on the Review Billing link.

 Finance Charges Area

Age contracts from an open date - A checkmark for this parameter means that contract aging will be based on the date that contracts are opened. Unchecking the box means that aging will be based on the date contracts are closed (all rental items returned).
 

Minimum Finance Charge - This is the amount that will be charged if a finance charge is levied on a customer and that charge is less than this amount.
 

Days until Finance Charges Incur - This is the default number of days a payable contract needs to age before adding finance charges.
 

Note: When a contract becomes “payable,” it is determined by the parameter “Bill these contract status(es)."

Monthly Finance Charge % - This is used to calculate the finance charge for customers that have a balance over the defined “Days until finance charge incur” parameter. It must be entered as a finance percent. For example, 1.50% would be entered as 1.50.

Discount Area

Prompt Pay Discount % - This parameter is used to calculate the maximum prompt pay discount that can be taken when receiving payments through Account Payments. Entering zero will disable this feature.
 

Maximum Discount % - This parameter defines the maximum discount percentage allowed on a contract. For example, 25 would limit the discount to 25%. You can override this maximum on a customer-by-customer basis using the Discount Tables.

Depreciation Area

Depletion % - This parameter sets the depletion percentage used for depreciation. This is only used if the depletion method is chosen for depreciating items.
 

Prorate Depreciation by Store  - This parameter setting will calculate depreciation per store based on the number of days that items are spent per month in a particular store. This is a licensed feature. 

Adjustments Area 

Save Closed Account Mods as Adjustments - With this parameter set, each time a closed account contract is modified, an adjustment contract will be created. The adjustment contract will list any items that were modified, the price adjustment, and any change in totals, such as taxes or damage waiver. The contract number will follow the credit contract format where it starts with a “c.”  , Closed Adjustments.

Save Closed Cash Mods as Adjustments - With this parameter set, each time a closed cash contract is modified, an adjustment contract will be created. The adjustment contract will list any items that were modified, the price adjustment, and any change in totals, such as taxes or damage waiver. The contract number will follow the credit contract format where it starts with a “c.”
 

Set inventory qty changes to Pending - With this parameter box checked, any changes to inventory quantity will only hold the changes under pending. You will need to go into Inventory Count and Finalize Count to make the actual changes to the records.
 

No Adjustments for Unbilled Contracts - With this parameter box checked, if the contract has not been billed, you can modify it and avoid a credit adjustment.