Bill Internal Departments with Memo Invoices
New World ERP supports memo invoices (bills) which are used for inter-departmental billing. Memo invoices let you generate internal billing invoices to other departments within your municipality. They may be generated as confirming invoices or as direct-bill invoices. With confirming invoices, general ledger entries are not made. With direct-bill invoices, an expense account in the department receiving the service is debited, and a revenue or contra-expense account in the department providing the service is credited.
Memo Invoice Setup
Invoice Types
Invoice types may be set up as memo invoices that will or will not generate general ledger transactions when posted.
A memo invoice that will not generate general ledger transactions may be set up for a department that pays a monthly bill for an entire organization, then sends an invoice to each department within the organization, showing the amount that was withdrawn from the department’s expense account for its portion of the bill. This type of invoice improves the method of auditing the expenses that each department incurs.
A memo invoice that will generate general ledger transactions may be set up for one department that bills another for services rendered. This type of invoice will create debits and credits, charging an expense account in one department and recognizing a revenue in another department.
To set up a memo invoice, follow the steps below:
- Go to Maintenance > Financial Management > Miscellaneous Billing > Invoice Types. The Invoice Type List page is opened.
- On the Invoice Type List page, click New or the Code hyperlink in the list to open an existing Invoice Type record.
- In the Memo Invoices section, use the Allowed drop-down list to select whether this invoice type will support memo invoices. The available selections
are: Yes, No, and Only.
Show more:- Yes – Allows users to specify that billing codes support memo transactions. Billing codes can either be selected as memo or not.
- Only – All billing codes are automatically selected as memo.
- No – Does not support memo invoices.
- If you select Generate G/L Entries, click Distributions to define the debit and credit distributions for this invoice type. Show more:
- If the memo invoice will not create general ledger entries, all of the general ledger account fields are disabled.
- If the memo invoice will create general ledger entries, the Memo Billing Expense Account field is enabled in the Defaults section. Use the Memo Billing Expense Account drop-down list to select the departmental account that will be expensed for the selected invoice type. When a memo invoice is created for this invoice type, the system matches the departmental organization set defined for the customer with this expense account to create the general ledger account that will be charged the expense.
- Use the Revenue G/L Account field to select the contra-expense or revenue account.
- You must also set up billing codes to be a memo billing charge. Click Billing Codes to open the Billing Code List page. This page lists all of the billing codes for the selected invoice type.
- To set up a new billing code, click New. The Billing Code page is opened.
- If the invoice type will be used for memo billing, select the Memo Billing Charge check box.
- Use the Memo Billing Expense Account drop-down list in the Override G/L Accounts section if you want the expense account for this billing code to override the account defined for the invoice type.
- Click Save to retain the changes.
Note: NOTE: When a memo invoice is created, only the charges marked as memo billing charges are available for selection. If the invoice being created is not a memo invoice, all billing codes are valid, regardless of whether the Memo Billing Charge check box is selected.
Customer Recurring Memo Invoices
On the Miscellaneous Billing Customer Recurring Invoices page, the Memo Invoice check box is available when the invoice type selected supports memo billing.
- Go to Maintenance > Financial Management > Miscellaneous Billing > Customers and select Recurring Invoices from the Attribute drop-down list.
- Select the Memo Invoice check box. If the Memo Invoice check box is not selected, any billing code that has not been flagged as a memo billing charge will be disabled.
- Click the Detail
icon to open the Invoice Billing Detail pop-up page. In Expense G/L Account, select a general ledger account that will be expensed for the invoice. In Expense Project, select a project that will be expensed for the invoice. - Click OK to save the update and close the window.
- Click Save to save the customer record.