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Using StorMan for Accrual Accounting (#ACTACCRUAL01)

Last updated:   Applies to:   In industries:   Of versions:   Special contents:
20130121 (Andy)   Pro, MultiUser, MultiSite, MultiView   Self Storage EditionMarina EditionVault Edition   9.1 (and higher)   n/a

Introduction

StorMan is designed to account for customer receivables on an accruals basis. When rent or other charges are billed to a customers account, these amounts become receivables and the income is recognised in the month when the charge is made. 

When a customer pays the balance of their account, then this is subtracted from the receivables balance and the payment increases the bank account by the same amount. All of the above is accomplished by printing monthly reports from StorMan, and then using these reports to make summary general ledger entries.

This article describes how to print these reports and then create the general ledger entries. The general ledger is not maintained by StorMan, but any good general ledger accounting package (even a manual record keeping system) may be used for this purpose.

 

Accrual Accounting vs. Cash Accounting

See #ACTACCVSCSH01.

 

Printing the StorMan Reports

As soon as practical after the end of the calendar month the following reports should be printed from the StorMan Reports menu (in the Accounting subsection)...

Report name Optimal document print (paper) orientation to use
Customer Balances (more on this report: #RPTCBAL01) Portrait
Income Charged Report (more on this report: #RPTICHR01) Landscape
Summary of Cash Received (more on this report: #RPTSMCR01) Portrait
Prepaid Report (more on this report: #RPTPREPAID01) Portrait
Deposits Held Report (more on this report: #RPTDHR01) Portrait

 

In each case the program will ask for the month end date and will default to the most recent month end date. These reports can also be generated in one session by selecting the Batch Print or Email Reports (more on this: #RPTBPOEML01) function from the Reports menu.

 

Preparing the General Ledger Entries

The following steps need to be completed:

  1. On the Customer Balances report (more on this: #RPTCBAL01), check that the total of the column headed Prev Mth Bal agrees with the closing receivables amount in the general ledger for the previous month. If it does agree then continue with step 2.

    If it doesn't then you will need to verify why the opening balance has changed from the previous month. Get out the previous months Customer Balances report and check that the closing balance of the previous month agrees with the opening balance on the current months report for each customer. Most often there would only be a very small number of customers whose balances have changed and this would only be where the operator has changed a customers transactions for the previous month after the report was printed.

    StorMan has a way of protecting from this happening by not allowing the operator to change transactions once the Customer Balances report has been printed for the month. To make this effective, go to Maintenance, System Setup and select the Settings 2 tab (more on this tab: #SYSSETTAB1101). In the field named Block Changes to items with a date on or before enter the date which is the 1st of the current month. For example: If you are currently in November 2012 enter “1/11/2012” in this field. This will mean that the operator cannot change any transactions for October 2012 or earlier. In future each time the Customer Balances report is printed this date will be set forward by one month. If you do need to change a transaction prior to this date you can change the Block Changes before... date, however the computer keeps a track of when this date is modified, so you can always tell if transactions have been adjusted by the operator.

  2. The total of the Customer Balances report called Tot Charges will agree with the total of the column Total Charges on the Summary of Charges report (more on this: #RPTSOCR01). From the Income Charged report you will prepare to create a journal that will add this total to the Customer Receivables in the general ledger and also enter the revenue amounts. From the Income Charged Report the following journal would be created:

    Code Account name Debit Credit
    731 Receivables (Customer Debtors)  862.50 862.50  
    901 GST / Tax   84.72
    120 Rental Income   628.00
    130 Late Fee Income   50.00
    920 Deposits (Customer Deposits)   100.00
    160 Insurance Income   49.78
    230 Sales - Locks   Sales - Locks
    TOTAL of Journal 862.50 862.50


    This journal should then be entered into the general ledger accounting program, and processed (posted) into the accounting period for the month of the report. For example if the annual balance date of the company is 31/3/2012 and you are processing the November 2012 report then all transactions will be entered with the date ‘30/11/2012’ in period number 8 being the 8th month of the financial year.

  3. The total of the Customer Balances report called Tot Receipts will agree with the total of the column Total Banked on the Summary of Cash Received Report (more on this: #RPTSMCR01). This should be the same amount as has been banked to the bank account during the course of the month. The only differences will be for Deposits not yet Credited as detailed on the lines of the report called Last Mth Banked This Mth and This Mth not yet Banked.

    When entering the bank statement entries into your general ledger they should all be coded to the Receivables (Customer Debtors) account to make this general ledger account agree to the Closing Balance column of the Summary of Customer Balances report.

  4. The Prepaid Rent report will give a total line for the column called "Rent in Advance".  This report can be printed either on a Whole Month basis or a Daily basis.  The Daily Basis method will result in a much higher Prepaid Rent because the Whole Month Basis ignores prepaid rent that is less than 1 month.

    Code Account name Debit Credit
    120 Rental Income 87.50  
    920 Prepaid Rent (Rent in Advance)   87.50
    TOTAL of Journal 87.50 87.50

     

    A reversing journal entry should be made on the first day of the following general ledger month.

  5. Schedule of Deposits Held report (more on this: #RPTDHR01) - the total of this report should agree with the general ledger account 920 called Deposits. This will be adjusted in the journal entry by the change in deposits from the previous month.

The above steps reconcile the bank, receivables and deposits account to agree with StorMan.

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