Account Categories

One of the most underutilized yet most powerful features of the BusinessPlus AR subsystem is its account categories. This feature is powerful due to its great flexibility. Simply put, account categories are the means by which the receivable accounts of an organization may be broken down into more manageable groups. With the receivable accounts neatly grouped, creating automatic charges and reporting for these groups becomes a snap. Below are examples of the type of fundamental questions that an organization should ask. Keep in mind that account categories will vary from organization to organization and are only limited to the imagination of the person or persons formulating them.

The first question to consider is, "How many different types of receivable accounts are there in the organization?" To answer this question, make a list of the different charges that are accessed on your receivable accounts. After each answer, create a short abbreviation of up to four characters that best represents the answer as shown below.

Some examples:
University
Fees accessed to Students (STUD)
Fees accessed to Faculty (FAC)
Fees accessed to Staff (STAF)
City/County
Fees are accessed on incorporated businesses (INC)
Fees are accessed on non-incorporated businesses (NINC)
Fees are accessed on private parties (PP)
Fees are accessed on community groups (CG)

Upon answering this question, it has been found that the type of the receivable account is important to the sample organization. To accommodate this fact, an account category titled "TYPE" was created.

The second question to consider is, "How are the receivable accounts managed in the organization?" Make a list of the ways in which the receivable accounts are managed, as shown below.
Some examples:
University
Department of Finance all tuition charges (FIN)
Department of Housing fees (HOSE)
City/County
Department A handles all building charges (A)
Department B handles business fees (B)
Department C handles charges to private parties (C)
Department D handles charges to community groups (D)

Upon answering this question, it has been found that the department responsible for each receivable account is important to the sample organization. To accommodate this fact, an account category titled "DEPT" was created.

To help determine what kind of receivable accounts are subject to special fees, such as late fees, make a list similar to the one in the following example:

• Internal receivable accounts not subject to late fees (IN)
• External non-profit receivable accounts are subject to lower late fees (EXNP)
• External for-profit receivable accounts are subject to higher late fees (EXFP)

It has been found that the relationship the receivable account has toward the organization makes a difference when assessing such fees as late fees. To accommodate this fact, an account category titled "For Late Fees" was created.

The fourth question to consider is, "Are there any account-specific numeric values associated with any receivable accounts?" Again, make a list of all the types of account-specific numeric values used at the facility.

Some examples:

• Fees may be levied depending on the size of many different things (abbr. SIZE)
• Fees may be offset by a volume factor, for large receivable accounts (abbr. VOL)
• Rates to be charged against a receivable account may vary (abbr. RT1)

Upon answering this question, it has been found that a numeric can be used with the following titles:

• "SIZE" will be used to specify the size of a receivable account, whether it is the size of the family, number of employees or members in a community group will depend on the "TYPE" category the account belongs to.
• "VOL" will be used to signify the pay percent that a particular receivable account is obligated to pay.
• "RT1" will be used as a generic rate holder that may hold a rate for a particular receivable account.

Is there more than one value from each account category applicable to any AR accounts? For example, consider a receivable account that is the responsibility of more than one department. Since community groups may incur building fees as well as general fees, department FIN and HOSE would both be appropriate assignments to the proposed category DEPT.

In the example above, the inclusion of "DEPT" as an account category, would be questionable. A better solution is the creation of an AR division to specify what department generated which specific charges. The charges, in turn, could be isolated by the responsible department and billed appropriately.

Upon answering the fifth question, it has been found that the proposed account category "DEPT" is not suitable as an account category since a receivable account may be the responsibility of more than one department. Having found that it is important to monitor what fees have been assessed by what department, the two values for "DEPT" will be used instead to create four separate AR divisions to track this information.

The next question to answer is "What are the accounts that have deferred charges?" Examples of these deferred charges are:

Tuition and dorm fees are set up as separate categories so there is a value associated with them such as payment plan one and two. The value in setting up these two categories is that later deferred charges can be set up for these categories.
The question to be considered in the final stages of the analysis is, "What are the reports that you wish to generate?" Once the categories are set up they give us the ability to report on the individual categories such as book store charges and snack bar charges.
Example:

Once you have decided on the categories to use, the next step is to set them up.

Setup

Having formulated the categories, it is now possible to set them up in the BusinessPlus AR subsystem. They can be entered from the AR General Information page set under mask ARUPGN. For this exercise we will be looking at only two of the five tabs, namely the Account Category and Total Definitions tabs.

The Account Category tab has two basic sections, one for Category Definitions and the other defining the Numeric Category Definitions. The two types of categories differ in that a receivable account has only one set of values associated with account categories, and one or more set of values associated with account term categories. In other words, account categories hold values of little changing characteristics while account term categories hold values that may change from term to term.

With account term categories we have the ability to reset the value for the category each term. This is useful if we have a value that changes from month to month. The following example has the entity category resetting each term and the rest of the categories do not.
On this page, the titles for account categories and numeric categories are defined. These titles will appear whenever account information is viewed on the category assignment page, which can be viewed in ARUPAC. Not all the fields must be completed.

The addition of the two account category values "NOT" and "NOR" to the table have been formulated to be assigned as the default values for "TYPE" and "REL" respectively. "NOT" means no type assigned, while "NOR" means no relation assigned. This is done so a report containing all the names of accounts with "NOT" or "NOR" can be generated effortlessly.

Category Values

Default category values can also be set up from the AR General Information page (ARUPGN). These category values are the values that all new accounts will be initialized to upon the creation in the AR subsystem. It is a good idea, at this point, to begin defining all of the possible values that the Account Categories will have so the most common or appropriate can be chosen as the default value.

Since account category values are required to be defined prior to their use in ARUPAC, the Account Categories tab, it is a good idea at this time to enter the above categories values into the BusinessPlus AR subsystem by running the mask, ARUPCD and selecting the Category tab. 

When we create a new Account ID into the AR subsystem through an AR set process, we have the ability to set a warning to alert the user that the Account ID only exists in P/E and has not been defined in AR ("Check AR Reference on AR"). This warning flag is set on the Global Settings tab of the General Information (ARUPGN) page. 

Below is a partial table of the categories and their values taken from the previous lists for the sample organization.

University

City/County

Use the AR Code Definitions (ARUPCD) page to enter in all the category values listed in the previous table.

Generic Numerics

On the General Information (ARUPGN) page, click the Account Category tab. We will use this page to set the numeric categories that each receivable account will have.

Since we uncovered three numeric categories during our analysis of the sample organization, we will now enter in these three numeric categories, namely, "SIZE," "VOL" and "RT1." At the same time, we will enter the default value for each of these Numeric Categories that all new accounts will be assigned when they are created for the first time in the AR subsystem.

It is important to note that all the default numeric values are held internally in the database as five decimal numbers. The value 1.00000 was selected as the default "SIZE" due to the fact that most new receivable accounts are anticipated to be single entity, private parties. The value 1.00000 was used as the default "VOL" volume rate so that all new receivable accounts are given no volume discount upon entry into the AR subsystem.
 
When the account category generic numeric default values have been entered, term codes need to be defined prior to setting up receivable accounts in ARUPAC.