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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.
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.
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).
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, as explained below.
A word of
caution: if you use the quick tract setup configuration, and you have
failed to set up any rates at all for a given customer & destination during the tract
setup, 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. Likewise, if you use the standard tract setup
configuration, but fail to relate a relevant revenue contract to the tract
during tract setup, the system will have no way of knowing that you want to
calculate revenue for the load. In each of these instances, the system
will not generate an error to the user. You can, however, identify
such omissions by running the Revenue Reconciliation report, as explained in
more detail below.
6. Review Pro Forma Revenue Calculations
Upon successful completion of step 4, you can review the expected -- or "pro forma" -- dollar amounts owing from each of your customers for the loads you just processed. There are two key places within the system to review this information. The first is the Pro Forma Invoice report, and the second is the Revenue Reconciliation report.
Pro Forma Invoices
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.
Revenue Reconciliation Report
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. Because we have not yet entered actual receipts, the actual revenue column shows Not Paid. The report will, however, show calculated revenues (that is, expected revenue owing) from each destination. You can use this report as an alternative to the Invoice report referenced above for reviewing revenues owing from each of your mills. 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.
This report is
also useful for catching tickets for which the system lacked enough
information to calculate an amount owing (as mentioned in Section 4). Tickets with no pro forma
calculated revenue will appear as follows in this report:
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.
7. Enter Actual Revenue Appearing on Settlements from the Mill
When you receive the settlements from the various mills, you can enter the actual amounts paid for each ticket into The Logger's Edge. The easiest place to make this entry is under the menu item Data Entry | Load Slips | Load Data and then navigate to the Load Revenue tab.
When you first go into this window, set the dates at the top of the window to match the dates encompassed by the mill settlement you are attempting to reconcile. Then click the green arrow to refresh the screen. You can further filter and group your results using the Tract pick list and the Group by box on the left side. In the following screen shot the loads for the 40023 - Lewis Tract and the Davenport destination have been selected.
This window will show all your load revenue for the tickets you have filtered. The pay weight and pay rate columns are filled automatically based on the results from the invoice calculations that you completed in Step 4 above. Thus, they show the expected rate and pay weight for each ticket.
To record the amount you received from each ticket, you can enter the dollar value directly in the Amount column. Alternatively, you can put your cursor in the pay weight or pay rate column. Then, as you validate the accuracy of the weight and rate as compared to the mill settlement, retype over the weight (or rate) that appears (assuming it matches with the rate showing on your statement). As you arrow down to the next cell, the system will calculate the amount by multiplying this rate by the pay weight. The virtue of using this second approach is that if there is a discrepancy in the amount, it will be easier to determine if the problem is with the rate the mill paid you, or the pay weight that they used in their calculation.
8. Run the Mill Settlement Reconciliation Report
We ran this report earlier (before we entered actual mill receipts into The Logger's Edge). Now that we have entered receipts from the mill settlements themselves, the report will highlight any discrepancies between actual versus expected (that is, system-calculated) revenues.
Open the Reporter and select the menu item Load Slips | Mill Settlements, Reconciliation. Enter the date range encompassed by the settlement you are reconciling, and choose only those destinations covered in this settlement. The resulting report will highlight differences in actual versus expected payments in red, as shown below. For the ticket with a $23.74 discrepancy, you can see that the discrepancy results because the mill used a rate of $145 per MBF, while the system used $150 per MBF as the rate that you set up during the tract setup (or during the revenue contract setup for "standard configuration" users). If the mill is incorrect, you will want to recover the amount for which you were underpaid.
