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Accounting Calculations

RouteTech edited this page Jun 25, 2018 · 1 revision

Revenue Processing

RouteTech uses a five stage algorithm to calculate the revenue distribution.

Step 1: Collections/Receipts

  • receipts are collected by location/sublocation either physically or electronically.
  • the collections are totaled by account (one account can have many locations/sublocations)
  • Day counts and various averages are computed.

Step 2: Deductions/Adjustments

There are 2 main methods the gross collected is affected, deductions and adjustments.

Standard Deductions

Standard deductions are excluded from the gross collected amount.

  • Refunds
  • Test money.

Adjustments

The adjustments processor is capable of much more complex calculations that affect the gross amount. Adjustments are deductions that apply under certain conditions. Adjustments have a frequency and a calculation method. Frequencies are by collection, day, month etc. whereas the methods are by activity.

For example,

  • an amount is deducted per collection as a collection fee.
  • an amount is deducted per year for annual taxes
  • a percentage of gross is deducted for coin processing
  • service calls are deducted
  • an amount per machine per day.

Distribution(splits)

There are three main classes of distribution(splits). Note that these calculations are based on the net amount that resulted from steps 1 and 2. In most cases the split identifies the portion as either for the operator or the account/vendor.

Simple Examples

  • Fixed Amount: a set amount of the net amount collected per period.
  • Fixed Percentage: a percentage of the net amount collected per period
  • Fixed Amount per unit: a set amount based on the number of units (usually suites or machines) per period.
  • Fixed Amount Per Unit Per Day: Similar to 3 but based on a daily rate rather than a period rate.

Sliding Scale Examples

  • Simple threshold: if the net revenue is above a threshold amount then a set amount or percentage is paid otherwise a different amount or percentage is paid.
  • Multiple threshold: if the net amount exceeds the threshold then a different amount or percentage is paid until the next threshold (or incremental step).

Progressive Scale

  • Similar the the sliding scale except that the steps are not incremental.

Step 4: Withholding Adjustments

The adjustment processor is capable of creating adjustments that affect the distribution after the amounts are calculated.

  • Some adjustments are applicable only after the payment amount is calculated and an amount is withheld if specified.
  • Guaranteed adjustments are deducted and may affect the account balance if specified.

Step 5: Balances

Accounts can have balances for a variety of reasons.

  • Each account may/may not have an opening balance amount.
  • The results of the payment processing steps are applied to the balance amounts.
  • Balances accumulate over the course of the year and need to be settled annually.
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