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Explains general information
regarding the 'Unallocated Revenue' Chart of Account line item on the Budget
Variance Report.
What
is the Unallocated Revenue Account?
The
Unallocated Revenue Account is a Billhighway system account used for any client
on the Cash Basis Method of Accounting. The main concept of the Cash
Basis Method of Accounting is to recognize revenue and expenses when physical
cash comes in or goes out.
Why
is the Unallocated Revenue Account Used?
When
a member submits an overpayment on his or her account, the Billhighway system
doesn’t yet know which revenue account to increase, since the payment is not
yet applied to an invoice. Therefore, the Billhighway system is designed
to increase the Unallocated Revenue Account when a member overpayment is
established in Billhighway.
Once the member overpayment becomes applied to an invoice, the Unallocated Revenue Account will automatically decrease and the revenue account attached to the invoice will increase.
NOTE: This “payment allocation activity” can, and often
does, cross fiscal years. Since the Unallocated Revenue Account balance
does not carry over between fiscal years, it can result in a negative balance
in the current fiscal year. For example,
a member submits an overpayment of $100.00 at the end of the 2013 fiscal
year. The Unallocated Revenue Account will reflect a positive $100.00
balance in the 2013 fiscal year. In the 2014 fiscal year, the overpayment
becomes applied, which results in a negative balance of ($100.00) in the 2014
fiscal year.
What to do with the Unallocated Revenue Account?
No action is necessary or should be taken.
Article ID: 258, Created: June 29, 2014 at 6:08 PM, Modified: June 8, 2016 at 4:06 PM