The linking of G/L accounts to system functions is a process that is usually performed only once, when you start using the Association Manager system. It may need to be accessed at other times if say the A/P functionality of the system was not utilized initially and the association would like to start to use those functions. The routine is accessed by going to Utilities – Routines – Accounting Setup – Assign General Ledger Account Numbers to System Functions.
There are few hard-and-fast rules about linking the Association Manager (AM) functions to specific G/L accounts. The rules apply more to the relationship between journal records and the link file than between the link file and the General Ledger.
The general rules are as follows:
A – Revenue is recognized whenever a “Fee” or “Billing” type journal transaction is entered, such as when annual dues are posted, or a person registers for an event. A fee transaction always results in a debit to a “receivable” account and a credit to a “revenue account.
B – The “adjustment” account is a contra-revenue account. Any fee adjustment credits the “receivable” account and debits the “adjustment” account. The balance in the “adjustment” account at any given time is the net of both negative and positive adjustments.
C – Any payment always results in a credit to a “receivable” account and a debit to a “cash” account.
D – Any refund eventually results in a credit to the “receivable” account and a debit to the “revenue” account. A separate “refund” account, however, can be set up to hold refunds until they are debited to either an A/P liability account or the appropriate “revenue” account. This is most useful for associations that do not automatically post refunds to an A/P voucher.
Each module contains at least one “receivable”, “revenue”, and “refund” account. In some instances, there may be multiple accounts for a category. For example, some associations have requested separate revenue accounts for annual dues, monthly (new member) dues, and individual (reinstatements) dues.
(because an individual could be either a new member or a reinstatement)
Only the Dues and Peer Review modules have “adjustment” accounts.
So far, the account names have been kept in quotation marks because they refer more to a type, or category, of account as defined in the AM system, rather than actual G/L accounts. In practice, one type of AM account might be linked to a totally different type of G/L account.
For example:
1. If there is no G/L account for Dues Receivable (a common, though not-recommended, approach), then the AM Dues “receivables” file can be linked directly to a G/L revenue account. As a result, the initial fee is posted as both a debit and credit to the revenue account, resulting in no net change. The payment would credit the G/L revenue account (the “receivable” account in AM), and debit cash, in effect creating a “cash” accounting system.
2. If an association is not interested in tracking adjustments in the G/L, the accounts in this AM category can be linked directly to a G/L revenue account. In this case, the net revenues would appear as a single line item on G/L statements.
3. If an association is not interested in separate G/L accounts for new member and reinstatement dues, or the association does not bill new members on a monthly basis, the three dues “revenue” links can all be directed to the same G/L dues revenue account.
4. In some instances, an AM account category might be irrelevant to a particular association. An example of this would be Product Sales Tax at an association that does not charge tax. It is suggested that an “error” account be established in the G/L, and all such AM functions linked to that account. Any activity in this account would indicate something wrong in the originating transactions.