Users with admin roles can find this report in the left menu of your admin platform under accounting.
The first thing to notice is the period selector. The period selector allows you to consult the information on a monthly basis. Past periods are locked while the current period is a month to date report, to the millisecond.
We've added a selector to differentiate between standard and agency subscriptions. This will make it easier to reconcile agency related orders from the standard subscriptions. You will notice when you select the agency subscriptions, the deferred commission will be calculated based on the remit rate specified in the plan. Note that for payments received, applied balance and refunds made are taken into account at the net amount after the remit rate is reduced. Agency cancelations are currently not permitted on the platform and hence have no impact on accounting.
The balance sheet section contains all the balances required in your balance sheet. This includes summaries of your accounts receivable, customer balance, and more.
The profit and loss section contains all the balances required in your profit & loss statement. This includes recognized revenue, commissions, and more.
The columns represent the different accounts and their total is the monthly variation for that account during that month.
Voided invoices are excluded from the accounting report and exports.
Trialing subscriptions are excluded from the accounting report and exports.
The rows are the actions applied to subscriptions within the period. You will notice that each row is balanced so that you can comply with double-entry accounting. This is also an easy way to validate the report, that the sum of each row should be 0.
This row summarizes all invoices related to subscriptions which were either created or renewed during the selected month, including subscriptions managed by agencies.
As a new invoice is created for a new or renewed subscription, it's total (tax in) is added to the
Account Receivable cell, it's subtotal (tax out) is added to the
Deferred Revenue cell and any tax rate applied to the invoice are summed up and added to the
Let’s consider a scenario were an invoice was created for a regular subscription having a plan value of 50$, for which a 10% tax rate was applied, the entry for this specific case will result in this:
Consider our previous example, but let’s say that this subscription is managed by an agency on a plan having a 60% remit rate.
This means your share of the subscription value is 30$ (50$ * 60%), while the agency's share is 20$. The agency's share is added to
Deferred commission cell and subtracted from the
Account Receivable cell.
Same logic applies to the
Taxes cell, which only includes your share.
Here would be the associated entry:
Summing it up
The result of the accounting report is the sum of all those entries for the selected month. Let’s say those two new subscriptions are the only subscriptions added in this period of time the result would be:
Recognized revenue is time-based and calculated from the number of seconds elapsed since the start of a subscription’s billing cycle, in relation to its total period length. In other words, the total dollar value of the subscription is divided by the number of seconds in the subscription’s term and recognized as time passes.
To represent this, let's consider that our 50 $ subscription lasts 50,000 seconds, which means that with every second that passes, we will be recognizing 0.001 $ (50$/50,000 seconds). After 1000 seconds the entry in the report would look like this:
After another 4,000 seconds, which amounts to 5000 seconds (or a tenth of the subscription) the report entry will be as followed:
As long as a subscription remains active, the system will recognize that revenue proportionally to the elapsed time. If we were to reproduce the two previous examples with our agency subscription you will notice that this also applies to commissions.
After 5000 seconds:
And again, the final result that is found in the accounting report is the sum of all the amounts recognized for all subscriptions. Which, after 5000 seconds if both subscriptions started at the same time would be:
Note: Learn more about the implication of gift subscriptions on accounting here.
As customers pay their invoices, amounts will be added to the appropriate Cash column and the same amount will be subtracted to the Account receivable column.
If a client pays with his credit card:
If a client pays an open or past due invoice by cheque:
In the event that a customer pays an amount in advance, normally through an offline payment, the value of that amount will be added to the customer’s balance. This typically occurs for customers renewing a subscription in advance.
This applies to all payments not directly applied to an invoice.
When a customer balance is applied to an invoice, the amount is transferred from the balance to the account receivable column as shown below.
The cancellation row has more cases to consider and it depends on the status of the invoice (paid vs unpaid) and whether the subscription is refundable or not.
- If the invoice is unpaid, when the subscription is canceled, we will subtract the amount originally added to the Accounts Receivables and the taxes. When it comes to revenue, we already have recognized part of the revenue but we were not paid for it. This amount will be transferred to the Bad Debt column. Here is an example using our previous case, if we canceled the subscription after 5000 seconds.
- If the invoice was paid and non-refundable, the remaining amount of the value of the deferred revenue will be recognized automatically. Here would be an example using our same case:
- If the invoice is paid and refundable, the remaining amount of the value of the deferred revenue and the associated taxes will be returned to the customer’s balance. Considering again that we’re canceling after 5000 seconds. This cancellation with a refund will look like this:
- If the amount paid (4$) is lower than the already recognized revenue, we will consider the unpaid portion of the recognized revenue (1$) as bad debt. We will then remove the amounts relating to that invoice from accounts receivable, taxes and deferred revenue as shown here:
- If the amount paid is larger (50$) than the already recognized revenue, but smaller than the total amount due and that this amount is refundable we have to refund the unrecognized portion and the associated taxes.
- If the amount paid is larger (50$) than the already recognized revenue, but smaller than the total amount due and that this amount is non-refundable we will recognize the paid portion as revenue.
When a refund is made, if the refund is made directly unto the credit card, the refund will be automatically subtracted from the customer’s balance and refunded to that credit card.
If the refund is made to an offline source, the refund will be to issue until processed, at which point the amount will also be taken from the customer’s balance.
Finally, if a refund is made to the customer’s balance, it will remain in the customer’s balance to be used to pay for an invoice at a later time.
Updated 8 days ago