The settlement report contains a lot of information, and this is how you should read and understand the content.
What is the billing cycle of CURRENT?
The billing engine of the CURRENT solution performs the following monthly steps:
- 25th of the month: Users are invoiced (subscriptions, charging, products ... )
- 1th of the month step 1: The Company monthly financial numbers calculated and Financial page updated
- 1th of the month step 2: Settlement on last month collected payment and last month cost to calculate Company balance
- Company monthly balance calculation:
Balance = collected payments this period - operational costs this period
- Company monthly balance calculation:
- 1th of the month step 3: Companies with negative monthly balance receives their invoices and Companies with positive balance are setup for payments
What happens during the settlement run (step 2 above)?
The settlement process captures all the paid money to Company last period and runs a settlement towards all Company cost last period. This provides a balance for the Company on money collected versus monthly cost.
NB!
A Location Owner Company collect money from their tenants and guests.
A Operator Company collect money from their Customers and own Locations.
IMPORTANT to note that the collected money could often be from invoices issued months ago
Example 1 - January settlement for a Location Owner company:
You are a Location Owner and one of your tenants are on the 25th of January invoiced for his February subscription (subscriptions is always invoiced in advance) and his January charging cost. If he has a registered and valid credit card and sufficient funds to pay, the payment will be done in full on the 25th of January.
On the Settlement this will now be listed as Collected payment for January Period and be part of your January balance settlement.
On the Financial page it will be a split, as the revenue from Subscription will be February revenue and the revenue from sold charging will be January revenue.
Example 2:
You are a Location Owner and one of your tenants are on the 25th of January invoiced for his February subscription and his January charging cost. Now, his registered credit card has expired and the payment bounces. He does not update his credit card details until February 5th, hence payment is made February 5th.
This will not be visible on the January settlement, as the payment is collected in February. This collected payment (5th February) will be on the February Settlement.
However(!), the Financial page will be updated with January Revenue from the revenues made in January, which are all charging and products sold in January. The money is not collected, but the numbers are January Revenue.
Why are not monthly payout the same as monthly profit?
Period Settlement Payout
The Company period payout is calculated as the balance between all collected money last period and all cost incurred last period. Now, remember that all collected money is payments made on any previously issue invoiced from Company to its Customers.
Period Payout (settlement result) = all collected money from paid invoices minus period cost
Period Financial Profit
The Financial Period is from the first day of the month to last day of month.
During this time the Company has made revenue and incurred cost. The financial page upper section is a statement of these numbers; Revenue, Cost, Profit.
This is not taking into account any paid or unpaid bills to Company customers, it is presenting the actual revenue, cost and profit.
Ok, so how does this work then?
Best way to explain is using an example:
The Financial page will show you that you have a revenue of 1000 NOK last period, a cost of 500 NOK hence a profit of 500 NOK.
The settlement report states you will receive a payout of 750 NOK.
Now, this is because;
- from all your previous months unpaid invoices, this month show that your customer actually paid invoices for the total collected payment of 1250 NOK.
- The paid invoices where mainly from last period issued invoices to your Customers. But also maybe some from 2, 3 and 4 months back, due to late payment from your Customers. And, some payments of next months subscriptions(!), as they are invoiced in advance.
- Now, it becomes obvious that collected payments are not remotelly connected to Monthly Revenue in the Financial Page for the Period
- The cost for the periode was 500 NOK
Settlement payout of 750 NOK = Collected payments (1250 NOK) minus cost (500 NOK)
Financial Profit remains at 500,- for the Period
How to understand the Settlement report?
- Info on Settlement period
- Info on Settlement CLAIMER and DEBTORS
- Info on Settlement balance calculation (Payments collected in period - Cost in the period)
- Detailed Info on payments collected in the period
- Detailed Info on cost in the period
Info on Settlement period
Statement about what period this is.
Info on Settlement CLAIMER and DEBTORS
Statement about who the CLAIMER is, which is the Company the settlement is calculated on.
Statement about the DEBTORs which is all companies that have issued invoices to you during the period. This is the list of operational cost for the CLAIMER during this period.
Info on Settlement balance calculation (Payments collected in period - Cost in the period)
Statement on the balance on Collected Payments in the period minus Costs in the period.
If the collected payments (actually paid invoices from your Customers) are more than the cost of last months operations, the balance is positive and a payout will be made. If the balance is negative, and invoice will need to be paid.
Detailed Info on payments collected in the period
Listing of all collected payments in this period. Collected payments are the actual paid invoices from the total amount of invoices that you/Company have issued to your Customers.
Detailed Info on cost in the period
Listing of all Company cost for the period. Example of typical operational costs for a period are
- Subscriptions cost for next period, as subscriptions are paid in advance
- Transaction fees on this and previous periods