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How To: Reconcile Mill Settlements with Expected Revenue
Background
Most users in the United States use The Logger's Edge to calculate expected receipts from the mills to which they deliver so that they can reconcile actual receipts with expected receipts on a ticket-by-ticket basis. This process allows users to identify tickets for which they have been paid incorrectly, or for which they have not been paid at all. The Logger's Edge has a nice Mill Settlement Reconciliation report that will highlight revenue discrepancies to the user, facilitating the reconciliation process.
This document explains how to set up revenue rates in The Logger's Edge, how to calculate and review expected revenue based on these rates, how to enter actual mill receipts for each ticket from the settlement, and how to reconcile the actual versus expected revenue from each mill.
(Version 4.5.5. introduced additional functionality to make the revenue reconciliation faster and more visually simple. This document reflects those additional features.)
Steps Involved
1. Ensure Basic Setup Table is Configured Properly
To use the Mill Settlement Reconciliation functionality in the manner described in this document, a Caribou Support Representative must ensure that your basic setup configuration is set to allow the user to enter actual revenue for each load directly into the system, as shown below.
You also want to check that the Loadslip_Revenue table has the following fields enabled:
2. Set Up the Relevant Pay Period
Ensure that you have set up your relevant pay period under the menu item Setup | Accounting | Pay Periods. (For most users, these periods should follow the pay cycle upon which you pay your employees/contractors, rather than the pay period upon which the mill pays you.)
3. Set Up Tract/Block and Revenue Rates
Ensure that your tract (block) is set up under the menu item Setup | Tracts (Block) | Tract (Block).
- If you are using the quick-setup tract configuration (typical for U.S. users), you will set up the revenue rates directly in the tract setup process, as shown here:
- If you are using the standard tract configuration, you will need to reference a revenue contract for each customer to whom you deliver from that tract. It is in the revenue contracts themselves that "standard configuration" users set up their revenue rates. See here for more information on creating revenue contracts and setting up rates.
4. Enter Load Tickets
Enter load tickets under the menu item Data Entry | Load Slips | Load Data.
5. Run the Invoice Calculator
The invoice calculator matches up the revenue rates you have set up for your various blocks with the tickets you just entered. To run this calculator, select Calculators | Invoices - Full. Choose the pay period (or periods) you are currently processing, and click OK.
To the extent the system does not find rates that match the loads you have entered, it will flag those loads to you in an error report. You do, of course, need to clean up any errors before proceeding (either by adding missing rates, or correcting errors on the load tickets you entered).
Pro Forma Invoices
Once you've run this calculator with no errors, you can review the calculated revenue amounts that you expect to receive from the various mills for these tickets, even before you receive payment from the mill.
To see pro forma invoices on a pay period basis, select the menu item Reports | Invoices | View: By Pay Period.
Select the pay period, and click OK to get a grid view showing one grid per customer owing you money for tickets in this pay period. You can review the amounts in this grid, or click the View Statements button to review a nicely formatted statement per customer.
6. Validate Proper Receipts from the Mill Vis-a-Vis the Calculations in the Logger's Edge
Click on the Loads icon (
)
and select the date range that matches the date range of the settlement from
the mill that you wish to reconcile, and click the green arrow to refresh
the list. Then click the Loadslip Revenue tab (circled below).
It is easiest to group the tickets by Destination/Product so that the right side of the screen shows just the tickets going to that destination. (If you have multiple products that go to a given destination, you can click the + sign next to the destination to further group your tickets on the right by product.)
Notice on the right side of the window that there is a column (in grey because it is uneditable) showing the amount owing for each ticket listed. This amount is the value that The Logger's Edge calculated (during the invoice calculator) as owing for that ticket. The pay weight, rate, and pay basis are auto-filled based on the calculations in the invoice calculator as well, but these fields ARE editable.
The idea is to go through each ticket on your settlement from the mill, and compare the amount that the mill paid you for the ticket with the expected revenue amount showing in this window. If the two match, type a "Y" (which represents a "Yes") into the "Paid in Full?" column, and arrow down to the next row. You will notice that the row that is paid in full turns green indicating that the ticket is "clear."
If the two don't match, then the question becomes: is it because your rate or your pay weight differs from the mill? Move to the pay weight and rate columns, and type in what appears on your settlement. (Don't worry --- the Logger's Edge still retains a record of the rate and pay basis it used to calculated the expected revenue.)
Once you identify the source of the difference, you then need to decide if you are going to worry about the difference. If the mill paid you a wrong rate, for example, it is likely that you will want to go back to them to get a correction. In that case, you want to leave the Pay OK? column set to N for "No."
If, on the other hand, the difference is that the pay weight is reduced for a cull amount that you did not have when you keyed the ticket in, then you may want to put a "Y" into the Pay OK? column to indicate that you want to treat the ticket as paid, even though the payment does not exactly balance with what you expected to receive. As you arrow down to the next row, the row that you marked as "Pay is OK" will turn pink. Pink indicates that you no longer need to worry about the ticket, despite the fact that the pay does not balance identically with what you expected to receive.
What if there is
a ticket on the mill's settlement that you do not see in the list?
First, check on the main loadslips tab to ensure that the ticket is, in
fact, in the database. Assuming it is, then check on the tract setup
to see if you have at least one rate for the destination associated with the
"missing" ticket. Chances are, you did not put in any rate for that
mill when you set up the tract, so the system could not flag to you that
revenue was owing.
7. Validate Proper Receipts from the Mill Vis-a-Vis the Calculations in the Logger's Edge
When you have worked your way through each ticket on your mill settlement, you will likely want to run a report that shows the total amount outstanding from that mill.
You can find this report in the Reporting Tool (launched by clicking Reports | Business Reports from the main program). The report is found under the reporting menu item called Load Slips | Mill Settlements, Reconciliation. This report is the key report in the system that allows a comparison of expected ("calculated") versus actual revenue receipts from the mill.
Enter the date range encompassed by the settlement you are reconciling, and choose only those destinations covered in the settlement you are attempting to reconcile. The resulting report will highlight differences in actual versus expected payments in red, as shown below. Notice that the first ticket in the list shows that you were paid for the ticket, but you were paid $213.43 less than you expected to be paid. Notice further that the "Actual Rate" column shows a rate of $61 (which was keyed into the Load Revenue window during the reconciliation process described above), whereas the "Calculate Rate" column shows that you entered a rate of $68 in the rate setup for this tract/destination combination. The remainder of the tickets were paid in full. This report will show a total row for each destination so that you can see the amount still outstanding from that mill for the date range you selected.
If you not yet entered actual mill receipts, the "Actual Revenue" column will show Not Paid. The report will, however, show calculated revenues (that is, expected revenue owing) from each destination. In this example, you can see that you expect to receive $2,250.25 from the Archer Mill for the date range you selected to run this report.
A word of
caution: if you have
failed to set up any rates at all for a given customer & destination, the system will have no way of knowing that you want to calculate a
revenue value for the load. It will therefore not generate an error during
the calculator process. You can, however, identify such omissions by
running the Revenue Reconciliation report. If the Contract column
shows a "Not Paid" entry, you did not give the system enough information to
recognize that you wanted revenue calculated at all.
Under the Contract column, the system will show the ticket as Not Paid. (Notice that in the prior screen capture, the Not Paid label appears in the Actual Revenue column, not the Contract column.) It is a good idea to review this report after you have completed a clean run of the invoice calculator to ensure that no tickets are showing as Unpaid in the Contract category. If you do find tickets in this state of affairs, check the tract's revenue rates to find your rate omission and correct it.
