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HOWTO Setup a Service Business

ow to Set Up a Service/Consultancy Business in webERP

Service/Consultancies do not hold stock of anything. Whilst webERP is rich in features that assist businesses that have to deal with stock (inventory), it is also suitable for service businesses.

When an items is defined (Inventory tab -> Add A New Item) , the field

"Assembly, Kit, Manufactured or Service/Labour: "

Set Up Service Item

must be defined as Service/Labour. This tells webERP that we are not keeping stock at all for this item. Stock inquiries will show N/A.
You might make an item say for "Computer consultancy" and another for "webERP support" the units might be in hours or other unit you charge for consultancy in.

Pricing for a unit of the service/consultancy item is much the same as any other item - you can price in different currencies and have prices for different customers etc. See the manual on pricing.

Often when you invoice service items you need to provide a description of what the order was for and this can often be several lines - you will not wish to go through changing the item description every time - it is too short anyway and will not show correctly on old invoices that had a different description. The answer is to use the feature that allows free-form narrative against each line item ordered/invoiced. This feature is accessed from Setup -> Configuration Settings

Line Item Narrative

With this option flagged to allow narrative, on each order entry line a text field will allow entry of up to 255 characters of text to describe what it is that was achieved with the service/consultancy work your business provided. The narrative entered here in the order will be shown on the invoice.

There is some criticism that entry of an order is unnecessary for a service based business. However, whilst we are required to enter an order in webERP, the invoice is only a few click exercise once the order is entered - there is no duplication of input at all. Many service based businesses agree up front on the scale of charges and the brief for the work - the order allows this to be recorded. Similarly, service based businesses often need to quote for their work before it is accepted. The same logic in webERP is therefore advantageous ... in my view!

HOWTO Setup Basic Sales Tax

Basic US Sales Tax Setup

This page is intended to assist with the setup of a basic US sales tax system. It may be useful for people in other jurisdictions to help them understand how the various tax options work, but this is only coincidental.
A brief description of each option is given, together with examples.

Please note that this is not tax advice. It is not compiled by an expert. Use at your own risk.

Tax categories

These are headings only, and are used to apply different tax rates to different types of goods:
Simple setup:
Taxable
Nontaxable
Freight (system required)

Other potential options would be food, luxury items, clothing etc, where these have different tax rates.

Tax province

Description of tax location. Most important where there are multiple business locations.
Simple setup:
City, county, state

Tax authority

This is where the different tax rates for each tax collected are stored. In addition, different general ledger accounts can be set for each type of tax.
Simple setup:
Minnesota sales 6.5%
CountyA sales tax 1.25%
CountyB sales tax 1.25%

Note that it is best practice to break the tax rates down into the maximum level of detail.
eg not:
Minnesota & county sales tax 6.75%
If you ever do business in another county, then you will need to go back and split the tax back out.
not:
CountyA & CountyB sales tax 1.25%
The rates are the same at the moment, but they will be different at some point in the future.

Different general ledger accounts for different tax types are useful as well - this allows each tax type to be separately reconciled - especially important if they have different filing periods.

Tax grouping

This is where the different tax rates are combined
Simple setup:
CountyA Sales Tax = MN + CountyA
CountyB Sales Tax = MN + CountyB
Exempt = 0%

NOTE: There is a gotcha at this point - the current default setting for the calculation order is set as 0 for the first line, 1 for the second etc. This will not calculate the first rate - the first rate needs to be set with an order of 1.

At this point you should be ready to go with basic sales tax functionality.

HOWTO Create Sales Analysis Report

Sales Analysis Report function

Yes it is all set up for periods. If you run the report with the current
period then it shows the period to date and changes as more invoices go
through.

Lets do an example to create a report to show the sales value and gross
profit for each sales area and each salesman that sells in this area

Receivables ->Inquiries & Reports -> Sales Analysis Reports

Under Define a New Report - Report Heading
Enter a heading "Sales By Area and Rep"

Select Sales Area for "Group By 1" then enter 0 in the "From" box -
since all sales area codes will be greater than 0 and then in the "To"
box enter "ZZZZZ" - hopefully the sales area codes you have defined will
fall between 0 and ZZZZZ - if you just want a single area then enter the
area code you want in both the "From" and the "To" boxes.

Select "Sales Person" for "Group By 2" then enter 0 in the "From" box -
since all sales people codes will be greater than 0 and then in the "To"
box enter "ZZZZZ" - hopefully the sales rep codes you have defined will
fall between 0 and ZZZZZ - if you just want a single rep. then enter the
rep code you want in both the "From" and the "To" boxes.

Click on enter information to commit this report to the database.

The list of reports will show with our new report "Sales By Area and
Rep" - click on the link to define columns for this report.

Enter column 1 in the column number
Heading 1 enter - "sales value" - this is the top row of the column heading
Heading 2 enter - "January 08" this is the second row of the column heading

Now look up the period number that January 08 is in and enter the period
number in both the "From period" and the "To period" if you wanted to
show a range of periods sales value you could choose any range - where
the to period is before the from period!
Since we want the display the sales value for January we need to Select
the "Net Sales Value" in the "Data to Show" select box - the column can
contain any of the data selections in that box. The Gross Value option
is the sales value before on invoice discounts are taken into account -
in most circumstances you will want the net sales value.

The budget or actual box needs to be changed from budget to actual. If
you want to compare against budgeted amounts then the sales budgets need
to be imported. (there is currently no user interface to enter budgeted
manually).

Click Enter information and the single column definition will show at
the top of the page and new empty fields for adding a new column (see below)

To create another column for the gross margin for January - same as
above - but entering as column 2 and changing the heading text from
Sales Value to Gross Profit - same period range. This time select "Gross
Profit" in the "Data To Show" and "Actual" for the Budget or Actual
field. Click Enter Information again to accept the 2nd column - the two
defined columns should show on screen.

Now to run the report click on the "Maintain Report Headers" link and
look down the list of defined reports to find the "Sales by Area and
Rep" report and click on the link to "Make PDF Report" - the report will
run and a pdf will be displayed...

HOWTO Bank Account Receipts

Bank Account Receipts

The following data is required:

* The bank account to which the payment has been (or is to be) made. A select box allows this to be selected from the list of defined bank accounts.
* The date on which it was paid. This is important since the accounting period in which the payment is entered is determined from the date. The system will default to today's date - this must be changed where bank payments are being entered retrospectively.
* The currency which is being paid. The entries to all bank accounts are made in local currency, but payment to suppliers may be made in foreign currency being purchased in local currency at the exchange rate entered. All bank accounts are recorded in local currency (there is no facility for foreign currency bank accounts). By default the system will use the functional currency of the business as defined in the company preferences page.
* The exchange rate - if the functional currency of the business is being used this should be 1. If another currency is being purchased with the payment then the rate at which it is being purchased should be entered.
* The receipt type, this can be chosen from a drop-down list.
* Narrative - applicable to the whole payment. Narrative applicable to individual general ledger entries can be entered separately.

HOWTO Bank Account Payments

Bank Account Payments

From the general ledger tab, the first link under transactions is Bank Account Payments.

The following data is required:

* The bank account from which the payment has been (or is to be) made. A select box allows this to be selected from the list of defined bank accounts.
* The date on which it was paid. This is important since the accounting period in which the payment is entered is determined from the date. The system will default to today's date - this must be changed where bank payments are being entered retrospectively.
* The currency which is being paid. The entries to all bank accounts are made in local currency, but payment to suppliers may be made in foreign currency being purchased in local currency at the exchange rate entered. All bank accounts are recorded in local currency (there is no facility for foreign currency bank accounts). By default the system will use the functional currency of the business as defined in the company preferences page.
* The exchange rate - if the functional currency of the business is being used this should be 1. If another currency is being purchased with the payment then the rate at which it is being purchased should be entered.
* Narrative - applicable to the whole payment. Narrative applicable to individual general ledger entries can be entered separately.

Payments can take two forms - either it is a general ledger payment or it is a payment to a supplier. General ledger payments require an analysis of how the payment should be posted to the general ledger. General ledger accounts can be specified either as the account code directly (if the account code is known) or by selecting from the select box. Any narrative applicable to the general ledger amount can be entered too - and the amount to be posted to the selected/entered account. The total payment is taken as being the sum of all the entries made. If the total of all entries made is negative then this is entered as a negative payment - these are accepted to allow for correction of data entry errors.

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Logic Instinct