The following article describes the recommended processes for managing revenue in advance.
Using these processes, when an order is transferred to your accounting system, Arlo will assign your selected account (GL) code (e.g. Revenue in Advance) from the course to the course registration line item on the invoice. Likewise, if a credit note is created for a refund, the credit note line item will include the course account (GL) code. Then, each month in your accounting system, you would move revenue from Revenue in Advance to Course Revenue for the courses that have been delivered in the given month.
There are three options (listed below) to calculate and manage this process.
Registrant transfers between courses on different dates, orders with multiple courses, and course date changes could cause variances.
We recommend you consult with a financial advisor before implementing any of the suggestions below.
Setup for managing revenue in advance
Before implementing these processes, you will need to ensure that the following account codes are available and the settings are set correctly.
- Setup Account (GL) Code called Revenue in Advance in your accounting system.
- Setup Account (GL) Code called Course Revenue in your accounting system.
- Set the default Account (GL) Code for all courses in Arlo to Revenue in Advance.
Read how to manage journal account (GL) codes in Arlo.
- Set up additional account/GL codes for each month of the year in your accounting system, e.g. 'Revenue in Advance Jan’, ‘Revenue in Advance Feb’,.
- In Arlo, manually assign the course account/GL code based on the start date of the course, e.g. a course starting in January would use the ‘Revenue in Advance Jan’ GL code.
- Ensure that all Arlo orders are imported into your accounting system. This is done automatically if you are using Xero integration.
- At the start of each month, in your accounting system manually journal revenue from the previous month (e.g. if the current month is Feb, a journal from ‘Revenue in advance Jan’) into the ‘Course Revenue’ account/GL.
- For this process, you need to set up a Xero Tracking Category for 'Month Revenue Realised'.
- In Xero, set up tracking options in the 'Month Revenue Realised' category for each month, e.g. “2019-01 (Jan-2019)”, “2019-02 (Feb-2019)”, ...
- On each course in Arlo, for the 'Month Revenue Realised' category, select the option based on the start date of the course. For example, if the course is starting on 12-Feb-2019, select '2019-02 (Feb-2019)' from the 'Month Revenue Realised' tracking category.
- Each month, run a report in Xero with the parameters;
- GL code equals 'Revenue in Advance', and
- Tracking code equals the <current month>.
- Create a manual journal based on the sum of the report from the 'Revenue in Advance' account to the 'Course Revenue' account.
- Ensure that all Arlo orders are imported into your accounting system. This is done automatically if you are using Xero integration.
- On a monthly basis, run a report in Arlo to calculate the value of revenue to move from 'Revenue in Advance' to 'Course Revenue'.
- Run an Orders lines (advanced) export filtering by 'Course start date' field, e.g. 'Course start date is within the last 30 days', or enter a certain period that you need to report on realised revenue.
- Include other filters as required, e.g. exclude cancelled orders.
- The report will provide a list of all order lines where the revenue can be realised (as the courses have since started).
- Create a manual journal based on the sum of the report from the 'Revenue in Advance' account to the 'Course Revenue' account.
See the full Export Schema.