Visulate Accounting

Visulate provides a set of double entry bookkeeping facilities that are fully integrated with its investment analysis, property management and tenancy agreement facilities. It provides a default chart of accounts which can be customized to meet the individual requirements for each business. Payment rules

Chart of Accounts

Users can record a chart of accounts for each business unit. A chart of accounts is a list of accounts that a business uses to track assets, liabilities, income, expenses and capital. Each account is classified with an account type which describes its characteristics.

Visulate maintains a default chart of accounts which is used to create an initial chart of accounts for each business unit. It is copied to the business when a new business unit is created, once copied there is no connection between the default account and the business unit. The user can add or remove accounts from the business’s chart of accounts without affecting the default chart.

Payment Rules

The accounts payable and receivable screens are optimized to minimize data entry requirements. The user presses an “Update List” button to generate a list of scheduled payments based on tenancy agreements and property expenses, pressing a “Paid” button for each scheduled entry records payment against it. We need the ability to default the accounts that are debited and credited for each transaction. This will limit the data entry requirements for new transactions and provide a mechanism to retrofit accounts onto existing ones.

Visulate classifies each transaction with a payment type (e.g. Rent, Repairs, Capital Improvements, etc). These payment types should be used in conjunction with the transaction type to define payment rules for the business unit. Every transaction is classified using one of the following types:

AP Scheduled – an accounts payable record has been created.
AP Paid – a payment has been entered for an accounts payable record.
AR Scheduled - an accounts receivable record has been created.
AR Paid – a payment has been received for an accounts receivable record.

Payment rules record the debit and credit accounts for each unique combination of payment type and transaction type. The following table shows some examples:

Transaction Type	Payment Type	Debit Account	Credit Account
AP Scheduled	Advertising	6100 Advertising Expense	2200 Accounts Payable
AP Payment	Advertising	2200 Accounts Payable	1100 Cash
AP Scheduled	Auto and Travel	6200 Travel Expense	2200 Accounts Payable
AP Payment	Auto and Travel	2200 Accounts Payable	1100 Cash
AP Scheduled	Capital Improvements	1300 Capital Improvements	2200 Accounts Payable
AP Payment	Capital Improvements	2200 Accounts Payable	1100 Cash
AP Scheduled	Carpet and Flooring	1300 Capital Improvements	2200 Accounts Payable
AP Payment	Carpet and Flooring	2200 Accounts Payable	1100 Cash
AR Scheduled	Rent	1200 Accounts Receivable	4000 Rental Income
AR Payment	Rent	1100 Cash	1200 Accounts Receivable

Default payment rules should be maintained that map to the default chart of accounts. They should be copied to the business unit on creation and made available for users to edit.

Accounts Payable and Receivable

The AP and AR screens need to be modified to utilize payment rules. A Debit/Credit column should be added to each row. It should allow the user to override the payment rule for the transaction. A drop down list should allow the user to select account values as shown in the following table:

Screen	Transaction Type	Account Type
Accounts Payable	AP Scheduled	Debit
Accounts Payable	AP Paid	Credit
Accounts Receivable	AR Scheduled	Credit
Accounts Receivable	AR Paid	Debit

We should also implement two usability enhancements based on user feedback:

The AR and AP screens should be divided into 2 sub-tabs for scheduled and unscheduled payments.
Provide a way to see all unpaid and partially transactions on a single page. Currently the user has to go back to previous months to record payments for tenants who are in arrears on their rent.

In addition to this the AR and AP screens will need to accommodate closed accounting periods. The requirements for this are described in a separate section of this document.

Journal Entries

Some transactions do not result in a payment. For example the value of a property or an asset will depreciate over time. These transactions need to be reflected in the books without creating a payment. Visulate must provide the ability to record journal entries. These entries should create rows in the general ledger and optionally allow a property to be assigned to them.

General Ledger

The General Ledger should be the main accounting record for a business unit. It will maintain entries for each AP, AR and Journal transaction. Every transaction should be posted to the ledger recording the accounts that were debited and credited.

A General Ledger summary screen should allow the user to review ledger entries for a given period. It should provide a summary page that lists the sum of the debits and credit for the accounting period and a drill down screen where the user can review details of each transaction that touched the account.

The General Ledger screen should also allow the user to close the books for a business unit (see Accounting Periods section below).

Reports

Two new reports should be created:

Balance Sheet – should summarize the assets, liabilities and equity for a business unit on a given date.
Income Statement – should provide a summary of the revenues, expenses and profit or loss for a business unit in a given period

Accounting Periods

An accounting period will typically be a month, quarter or year. At the end of an accounting period some accounts need to be zeroed out while others remain open. Account balances for balance sheet accounts (assets, liabilities and equity) are carried over from one period to the next. Income statement accounts (revenue, expenses and cost of goods sold) are reset to zero at the start of each period.

The user should be able to close the books at the end of an accounting period. This process should calculate balances for each balance sheet account and record it in the database. Once closed, users should not be able to edit the account entries for that period. For example, a user should not be able to modify accounts payable or receivable entries for 2008 after the 2008 books have been closed.

An “undo close books” feature should also be available. This should remove the most recent calculated balances from the database and re-open the accounting period for edits.