Rule-based income distribution and location accounting - a case study
General information
This article shows how payments with the help ofrule-based yield distributionare correctly distributed among the partners involved and how different locations set up transparent billing. To show the mechanisms, we have built a corresponding scenario.
Starting position
Locations
The two locations BLUE and RED are given. Three professionals work at each location:
Account plan and cost centers
An income account and cost center were set up for each professional carrier at the respective location. This creates the prerequisite for being able to divide incoming client payments appropriately and book them on the different income accounts.
We could only be content with income accounts and leave cost centers out. Then payments would be posted directly to the different earnings accounts of the involved professionals. In order to greater transparency, however, we would like the entire distribution to be fundamentally through the earnings account of the mandate-leading partner. Therefore, we need cost centers as an additional dimension to control the distribution of shares.
In addition, we create an income account and a cost center for the other location. We will handle shares made by the professional representatives of the other location. We call this account or cost center "superbly RED". Account plan and cost centers therefore look like this for the BLUE location; at the ROT site:
The account plans of the two locations are harmonized, i.e. identical account numbers are used for accounts to be consolidated in downstream evaluations and otherwise ensure that the accounts do not overlap. Here again the overview of the professional executives and the associated income accounts and cost centers:
Professional carriers | Location | Income account | Cost center |
Bruno Bolte | Blue | 8401 yields Bruno Bolte | 101 KS Bruno Bolte |
Bertha Beck | Blue | 8402 proceeds Bertha Beck | 102 KS Bertha Beck |
Bojan Born | Blue | 8403 Yields Bojan Born | 103 KS Bojan Born |
Ralph Raff, Managing Director | Red | 8601 Yields Ralf Raff | 201 KS Ralf Raff |
Pink Raabe | Red | 8602 Yields Pink Raabe | 202 KS Pink Raabe |
Ronald Rieder | Red | 8603 Yields Ronald Rieder | 203 KS Ronald Rieder, Germany |
Specialist
Since the sites support each other, it happens that professionals from BLAU site work on the mandates of ROT site and vice versa. In order for this to be possible, the professionals of the other location must also be recorded as specialists at each location. The corresponding income accounts and cost centers are deposited with the "own" professional executives of the site, whereas the account or cost center are selected "superbly" professional carriers. The following example shows the specialists of the BLUE site; at the ROT site, the recording takes place accordingly:
Sample mandate
To test our settings, we create a client and a sample mandate at the BLUE site. The mandate was Bruno Bolte and the mandate was acquired by Ralf Raff:
Output distribution rule
Finally, we create an income distribution rule: 10% of the fee turnover goes to the acquirer, 5% to the mandate leader and the remaining 85% are divided into the individual specialists who have worked for the mandate:
As mentioned earlier, we would like to process the entire distribution through the earnings account of the mandate-leading partner. Therefore, we directly select Bruno Bolte's earnings account 8401 under "Account". All distributions are now processed through this account. The cost center identifies the beneficiaries.
Performance recording
Since the liability case is very complex, different professionals from both locations work on it and now record their times. 100 hours are worked on the mandate, as the following time entries show. In addition, EUR 1,000.00 will be charged.
Professional carrier | Location | Hours |
Bruno Bolte | Blue | 10 |
Bertha Beck | Blue | 15 |
Ralph Raff, Managing Director | Red | 25 25 |
Pink Raabe | Red | 50 |
Below is the entry of the services in the dossier and the resulting invoice:
Yield distribution
Each payment entered on the invoice is now automatically divided according to the deposited rule (for partial payments, the distribution is proportional):
Control with Excel
Client's earnings account:
Cost center of the mandate manager:
Location compensation
If the sites enjoy a certain economic independence, it is not enough to calculate the shares of the various persons involved on Bruno Bolte's income account. The services of the ROT professional drivers now result in a claim of the ROT site against the BLUE site. This claim does not have to correspond exactly to the services provided by red professionals. The BLUE location could withhold a share. However, a billing document would be desired due to which the BLUE location could then provide compensation to the ROT site.
Duplicate services
For optimal transparency, we proceed as follows:
- The services of professional drivers RED will beduplicated by copy/paste
- The quantities are made with aMinusthe services now represent the balance against RED
- The services are provided toneutral specialistsassigned (e.g. ADM) so that they have no influence on the statistics of professionals
Credit
Now a credit is created from the services via the "Invoice" promotional menu. Here it is necessary to make the correct settings:
- The recipient of the credit is the location RED (connect it in the mandate settings)
- Choose the account of mandate manager Bruno Bolte as income account
- The credit can be created on a net basis, without VAT
Open the created credit and delete the earnings distribution rule. If there are reductions for this invoice, you enter them with the Inputs/Inclusions function.
Payment output at BLAU
The remaining amount will be refunded by bank transfer to RED.
Payment receipt at ROT
Now we change perspective to the RED location. There, payment receipt is posted in accounting, whereby the payment receipt of 21,000.00 must be divided into the share for Ralf Raff and Rosa Raabe:
Conclusion
The described procedure results in the following result:
Working time statistics
All working hours apply at the BLUE site and are distributed to the specialists created there. Negative hours apply for the credit, but they are booked to the ADM (administrator account) and therefore do not have to be considered:
Note that ROT Ralf Raff, who was created at the BLUE site and the specialist ROT Ralf Raff, who exists at the ROT site, are not technically the same data sets. If the hours booked for professionals Raff are to be considered in a cross-site evaluation, the corresponding hours must be consolidated. Both data sets are connected to the same Ralf Raff user account, which is why the data can be easily merged.
Accounting BLUE
In accounting BLUE, you can see the amount paid by the client on the bank account, except for the transfer of the share RED, i.e. 42'840.00 minus 21'000.00 = 21'840.00. VAT will be fully charged by BLAU. Accordingly, we find on creditors VAT the amount of 6'840.00. The redemption account 8310 shows the share of expenses and the account of mandate manager Bruno Bolte the fee share. BLUE 14'000.-, consisting of the work done by Bertha Beck and Bruno Bolte, as well as the retention BLUE remain here.
Accounting RED
In accounting RED, we only find the payment receipt of 21,000.00, which was posted to the income account of the two red professionals.
Cost centers
The evaluation of cost centers results in the amount due to each professional carrier. BLAU's retention when transferring the share of RED remains on the income account 8401, but is not assigned to a cost center.
Cost center Bruno Bolte:
Cost center Bertha Beck:
Cost center Ralf Raff:
Cost center Rosa Raabe:
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