Balance Forward Account Statements
Balance Forward accounts most commonly make a single remittance when they receive a summarized statement that is printed at the end of each financial period.
The best way to describe the statement processing for Balance Forward accounts is to identify them with a type of account we are all familiar with -- credit card accounts. Credit card companies like MasterCard and Visa typically operate using Balance Forward accounts.
When you receive a credit card statement, it typically reports the debit and credit transactions only for the current month. Any open transactions from the previous month are summarized under a single transaction entitled "beginning balance" or "previous balance". The statements for Balance Forward accounts in DISTRIBUTION / EXPRESS report data similarly.
To discuss how data is reported for Balance Forward accounts, it is necessary to look at the month close process and understand its affect on Balance Forward accounts.
Month Close Process For Balance Forward Accounts
For Balance Forward accounts, the month close process does two important things:
It summarizes all transaction detail for the period in to one "previous balance transaction".
It deletes all transaction detail for the period after creating the "previous balance transaction". (The detail transactions exist in the RPRD A/R Master File (detail records.))
Transaction detail appears on the statement only for the month in which it occurs.
Any unpaid or open transactions will appear on the next month's statement as a single entry for "previous month's balance".
The above information should be sufficient for processing Balance Forward statements. Refer to the Index to locate areas where Balance Forward accounts are pertinent to other processing.
Exception Reporting for Balance Forward Accounts
Typically for Balance Forward accounts, there is a single previous balance transaction The transaction that is generated during month close for each Balance Forward Accounts, which summarizes the detail records entered during the month into a single debit or credit transaction to be carried forward. created and carried forward to the next month during Month Close. This transaction is the net of all activity for that account during the month and can be either a debit or a credit.
There are two cases where the month close process will create two or more previous balance transactions for a Balance Forward customer:
If you are a multiple-company business and the customer has purchased from more than one
company during the period.
Multiple Terms Codes
During Month Close, the system creates a previous balance transaction for each terms code within a customer account.
A customers account could have transactions with different terms codes if, for instance, the default terms code was overwritten at the point of Order Entry.
The customer's regular terms might be 2/10 net 30, but for certain items purchased they were given 5/5 net 30 in Order Entry. If this situation existed for a customer, the account would have two terms codes for the period.
The system would net all transactions in each terms code group and carry forward a previous balance transaction for each terms code.
The following example gives another case where the system will report multiple previous balance transactions per customer on a monthly statement.
You operate multiple companies with multiple locations in each company.
You chose to consolidate the reporting of service charge The finance charge assessed on past due balance and reflected on the individual account as a debit. and balance forward account A customer account that has been assigned the Balance Forward billing method. The key characteristics of Balance Forward Accounts are as follows: Transaction detail appears on statements only for the month in which it occurs. As part of the month close process, the detail transactions are summarized during a single, consolidated, previous balance transaction. Any unpaid transactions appear on the ensuing month's statement as a single entry denoted "previous month's balance". Credit card accounts typically represent a Balance Forward billing method. data across all locations for each company. (This decision is made when you install the Service Charge % master file.)
Location 2 RAL Raleigh, NC
Company 2 Location 3 CHL Charlotte, NC
Location 4 ATL Atlanta, GA
When Month Close is run, the system creates a previous balance transaction for each location. Each previous balance transaction reports the net balance for a location.
If a customer did business with locations in different companies during the month. then his monthly statement will report a previous balance transaction for each location. In this case, his statement would show two previous balance transactions, one for each company.
If a customer did all his business with one company during the month. then his monthly statement will report one previous balance transaction, because you chose to consolidate within each company.Source: www.dms-systems.com