Chapter 7 CDR-ACCOUNTING MANUAL

Transcription

1 Chapter 7 CDR-ACCOUNTING MANUAL NATFM,HYDERABAD 0

2 Contents Page No. 1. Introduction to Accounting 3 2. Accounting Scope 4 3. Process Flow 6 4. Chart of Accounts 8 5. Accounting for Invoices and Related Payments 13 a. Invoice Generation and Complete Payment in the same SSA 14 b. Excess/Double Payments when payment is made in the Billing SSA 16 c. Partial Payments made in the Billing SSA 19 d. Remittance to different SSA, Same Circle (Complete payment) 22 e. Remittance to SSA of Same Circle (Partial Payment) 24 f. Remittance to different SSA of same Circle (Excess Payment) 28 g. Remittance to SSA of different Circle (Full Payment) 29 h. Surcharge on delayed payments (Late fee) Accounting for GSM Collections 30 a. GSM Invoice of one Circle, Payment in SSA of same Circle 30 b. GSM Invoice of one Circle, Payment in SSA of different Circle Adjustments 32 a. Debit Voucher b. Credit Voucher 34 c. Cancellation of Invoice 36 d. Write off of Bad Debts e. Collection against Write off Payments from Various Channels 38 a. Payments on CSR counter 38 b. Payments from Post Offices 39 c. Payments from Banks 40 d. Payments through ECS 42 e. Payments through Bill-desk f. Payments involving units outside the CDR system(eru) Cheque Dishonour Scenario Missing Daily Lists Scenario (Unadjusted Credits) Reconciliation of channel payments Accounting for sale of Pre-paid Cards/Modem through PMS counters 13. Accounting for Advance Payments Period End Closing Activities 56 a. Income Received in Advance 56 b. Accrued Income 57 c. Interest on Deposits d. Accrued Interest on Deposit Refund Accounting treatment for OYT rebate in CDR System Implementing Bundled PC EMI solution in the CDR system Migration Strategy Revised Strategy for Financial data/delta payment Migration Journal entries for migrated financial data Handling third party vendor payments collected through CDR invoices Accounting for Zonal Electronic Stapling(ES) Handling of ES discount in CDR Accounting Account Settlement procedure Accounting module-oracle applications-operation guidance Accounting for amended Service Tax Rules -Point of Taxation 113 NATFM,HYDERABAD 1

3 List of Figures Page No. Figure 1: Process flow for Accounting 3 Figure 2: Billing and complete payment in the same SSA 15 Figure 3: Excess or double payment in the same SSA 16 Figure 4: Excess or Double Payment Adjustment in the next invoice 18 Figure 5: Refund of Excess or Double Payment 19 Figure 6: Refund for closed/surrendered connections 19 Figure 7: Partial payment made in billing SSA 20 Figure 8: Partial Payment adjustment in next cycle 21 Figure 9: Remittance to different SSA in same circle 23 Figure 10: Remittance to different SSA in same Circle (Partial Payment) 25 Figure 11: Remittance to different SSA in same Circle (Partial Payment Adjustment) 27 Figure 12: Remittance to different SSA in same circle (excess payment) 28 Figure 13: Remittance to an SSA in different circle (full payment) 29 Figure 14: Surcharge on delayed payments(late fee) 30 Figure 15: Accounting for GSM Collections: Payment in SSA of same Circle 30 Figure 16: Accounting for GSM Collections: Payment in SSA of diff. Circle 31 Figure 17: Debit Voucher: Settlement of short billed invoice 33 Figure 18: Accounting for debit voucher (Settlement of short billed invoice) on generation of next invoice 34 Figure 19: Accounting for Credit Voucher where the bill is fully settled 35 Figure 20: Accounting for Credit Voucher on Gen eration of new Invoice 36 Figure 21: Accounting for Write Off of Bad Debts 37 Figure 22: Accounting Entry on Billing 38 Figure 23: Accounting entry on receipt of daily list 38 Figure 24: Accounting entry on receipt of TRC Schedule and Cheque 38 Figure 25: Accounting entry on receipt of daily list from Head Post Office 39 Figure 26: Accounting entry on receipt of TRC Schedule, Cheque from HPO 40 Figure 27: Accounting entry on receipt of payment information from Billing 40 Figure 28: Accounting treatment for Discount on ECS 41 Figure 29: Accounting entry for Missing Daily list 53 NATFM,HYDERABAD 2

4 1. Introduction to CDR Accounting The integrated accounting has been implemented for the first time in BSNL through the CDR based Operation Support System/Business Support System(OSS/BSS). The whole accounting process is automated and taken care of by the system with hardly any user intervention. Accounting is done in the CDR system based on actual details. The main sources of information for Accounting, at present, are: Zonal Billing System Zonal Payment Management System The accuracy and timeliness of data in accounting system depends on data from the above systems: Following figure is a representation of the various systems that interact with the Accounting system. Zonal PMS Zonal Billing System Zonal Accounting System External Financial System Figure:1 Process flow for Accounting The basic flow within a zone is captured as: 1. Invoices are generated in CDR 2. The billing data is transferred to PMS for receiving payment 3. GL Code based information on billing data from CDR system is sent to the Accounting system for doing credit posting to Revenue A/cs with corresponding debit posting to the relevant Sundry Debtors and receivable accounts. 4. Invoices are settled through approved payment channels which operate in offline and online modes. 5. Each channel operates based on a hierarchical structure of Collection Desk (CD) and Collection Center (CC). 6. Collection Centre (or Collection Desk) sends payment data directly in the form of daily lists to be entered into the PMS. Collection Center does the monetary settlement with BSNL through PMS. 7. PMS sends daily feed to Accounting - receiving_ssa and Collection_Center wise. NATFM,HYDERABAD 3

5 Based on this,the Accounting will debit to one of the following accounts: (i) Claims Recoverable from DoP (ii) Claims Recoverable from WSC (iii) Claims Recoverable from Banks (iv) Claims recoverable from AO (Cash) (v) Claims recoverable from State Govt IT(E-seva) (vi) Claims recoverable from EAU(Portal) (vii) Claims Recoverable from Others etc. with corresponding credit to CDR TR Collections account. Money from the Collection Center will be received at the prescribed frequency and managed by AO Cash simultaneously. 8. When money received is entered into the PMS (based on Schedule) and the information transferred to the accounting system the entry will be to Credit collection center (Claims Recoverable from HPO/Banks/AO Cash/Others/Bill Desk etc) and Debit TRC Settlement account operated within the CDR accounting system 9. PMS sends collection information to the home billing system in the form of lockbox files in the required format. 10. When CDR billing system does the posting of these payments, it sends the GL Code based payment information to the accounting system. Accounting system does the posting of this by debiting TR Collection Account and crediting the relevant Sundry Debtors and relevant Tax Recoverable heads created based on billing data. Relevant Remittance Accounts will be used in case Receiving and Owning SSA are different and also when collections belong to external systems like GSM. 2.Accounting Scope The objective of CDR Accounting is to implement accrual accounting at a consolidated level. Scope for Accounting: o o o o Landline and Broadband: Revenue accounting GSM: Payment to be collected by zonal PMS, Remittance to be passed to GSM at circle level. Leased Circuits: Payment to be collected by zonal PMS and accounting to be carried out in EFS (External Financial System) with necessary Journal entry. Revenue accounting is to be done based on the feeds from PMS & CDR Billing only and no other interface is in the scope of accounting at present. NATFM,HYDERABAD 4

6 o o o Accounting system can confirm the consolidated amount received at SSA level and not at individual transaction level. Reconciliation with individual customer account (which is maintained at Billing system) is not in accounting scope as only consolidated entries are done based on feed received from other systems and break up of these entries are available in the base systems (for payments in PMS and for cleared and outstanding amount in Billing system). Reconciliation shall be carried out manually by comparing the accounting output of GL extract and a report from Billing system. Debtors are maintained at consolidated level in Accounting and individual customer accounts are maintained in relevant billing systems. Debtors control account is based on service types eg. Landline and Broadband. Reporting scope (feed for External Financial System) o o GL Extract (SSA Level; for all accounts in the system) Trial Balance (SSA Level) In the existing system of accounting where SSA is the basic accounting unit, any financial transaction done by one SSA that affects the accounts of another SSA will be settled through the operation of Remittance heads. The idea of maintaining these heads is that while no physical exchange of money will take place, the impact of the transaction will be incorporated into the books of accounts of the SSAs involved. For this purpose, the following Remittance heads are used o o Remittance same circle (O) and (R) Remittance between circles <Circle name> (O) and (R) Further Remittance heads are used for parking payments received by PMS related to invoices generated by GSM etc. Fiscal Year: o Fiscal year shall be from 1st April to 31st March. Currency: o o Reporting currency needs to be INR. Billing currency for retail customers has to be INR. It is necessary to keep the accounts of each month open for a sufficient period in the next month to ensure that all the transactions are entered into the system. In the existing systems the TR Accounts for the previous month are open until the 25th of the next month ie upto generation of SLR reports. In the CDR system also it is proposed to close the accounts by 15 th of next month from now onwards. NATFM,HYDERABAD 5

7 3. Process Flow With reference to Figure 1: Flow from Billing to Accounting: o Information required Per Billing Cycle: GL Code wise billed amount of revenue/adjustments for revenue owning SSAs in each circle, consolidated SSA wise. Discounts: As they will be adjusted against amount outstanding as a part of invoice information, posting in accounting to be done GL Code wise like normal revenue items during bill cycle run with additional line item in invoice. Excess/Double Payments: For all SSAs in each circle when adjusted in subsequent invoice. Accounting will capture this as an additional line item based on the consolidated GL code wise feed received from Billing system. Adjustment entries for deposits and interest on deposit will be passed based on the consolidated feed from billing system. The logic for interest and principal amount break up is to be maintained at billing system level. Refunds: As and when refund of deposit is due, refund of double/excess payment and refund on closed/surrendered connections Either as an adjustment in next invoice Or refund is given in the form of a cheque o Information required Daily Clearing information in order to clear amount outstanding including both revenue receiving and revenue owning SSA, consolidated based on Owning and Receiving SSA is received from Billing at end of day. Adjustments Debit Voucher information for all SSAs in each circle. Credit Voucher information for all SSAs in each circle. Consolidated feed for Interest on deposit for all SSAs in each circle based on type of deposit to be posted for provisioned connections based on GL Codes. o Write-offs: Write offs are manually done in Billing and posted to Accounting on periodic basis. Reversal of write-offs not supported Collections against write-off, if any, will go to Other Income. Posting to be done by PMS to Accounting. NATFM,HYDERABAD 6

8 o o o At year end, consolidated feed for Interest accrued on interest bearing deposits for all SSAs in each circle based on type of deposit to be posted for unprovisioned new connections(prospects) and additional services for existing customers. At end of financial year or quarterly as desired, feed file on Accrued Income: Unbilled revenue items (Earned but not billed) grouped SSA wise upto last day of every month. At end of financial year or quarterly as desired, feed file on Advance Income: eg. Rent (Billed but unearned) grouped SSA wise, revenue unearned and unbilled grouped SSA wise Flow from Payment Management System to Accounting: o Daily Basis Payment information combined SSA wise: Revenue Receiving SSA Revenue Owning SSA Collection Centre: Details of payment received from Head Post offices, Banks, AOCash, Bill Desk etc. Information about the bounced cheques both Retail cheques and settlement cheques Deposit information For all SSAs in each circle, payment received in the form of deposits. This information need not be identified as deposits. This identification will be done by the Billing system o Periodic Basis (mainly by AO Cash) Information when schedule is received for Billing System Consolidated information on amount received. Collection centre (HPO, Bill Desk etc) Revenue Receiving SSA Flow from Accounting to External Financial System o At period closing, a report containing GL Balances will be generated containing GL Code, GL Account name, Closing Balance, SSA, Circle. o An SSA wise trial balance will be obtained. NATFM,HYDERABAD 7

9 4. Chart of Accounts: Following are some important G/L codes introduced for and operated in CDR system: Allotment of account codes under Current Assets Schedule 113 (Basic segment) Minor account code: Detailed suspense account codes CDR based TRC claims recoverable is allotted CDR based TRC Claim from DOP CDR based TRC Claim from Bill desk CDR based TRC Claim from Banks CDR based TRC Claim from Cash counter of BSNL CDR based TRC Claim from State Govt. IT solution channels CDR based TRC claims recoverable from EAU CDR based TRC Claim from others The following existing account codeswill be utilized for booking of the claims, which are not pertaining to CDR based TRC claims Claims recoverable from DOP Claims recoverable from Bill Desk Claims recoverable from Bank Others Minor account code: Revenue Accrued Settlement of CDR based transactions with CMTS Detailed suspense account codes CDR based Debit Memo Invoicing CDR based claims for bill collection charges recoverable from CMTS CDR based claims for share of discount on post-paid bills recoverable. Allotment of account codes under Current Liability Schedule 119 Minor account code: Detailed suspense account codes CDR based TR settlement / adjustment Account CDR based TRC Settlement Account CDR based TR Collection Account CDR based Unallocated TR Collection Account CDR based Credit Memo Invoicing Account CDR based third party system TR collection Account CDR based ATC settlement Account Settlement of CDR based transactions with CMTS CDR based claims payable to CMTS for post-paid account CDR based claims payable to CMTS for pre-paid account Allotment of account codes under Schedule 419 in CMTS segment: Minor account code: Detailed suspense account codes Settlement of CDR based transactions with Basic CDR based claims payable to Basic for bill collection charges CDR based claims payable to Basic for share of discount on post-paid bills NATFM,HYDERABAD 8

10 CDR Based Claims for bill collection charges recoverable from CMTS: With the introduction of PMS, all restrictions on CMTS bill payments get lifted. CMTS bills can be paid at all payment points accepting Land Line payments. The collection channels are not required to separate out the CMTS payments. It will remain mixed with the LL payments. Similarly the schedules also will be common. That is the collection channels will give a single statement along with the settlement cheque. The commission on collection will be deducted in advance or paid later by the Basic segment even in relation to CMTS Bills. When we have to do Segment Based accounting, the bill collection charges that Basic segment has paid for collecting Mobile bills will have to be reimbursed to the Basic segment by the Mobile Segment. In fact even for online acceptance of mobile bills, the Basic segment should claim a bill collection charges from the Mobile segment. While in the first instance, the collection charges will be paid by the Basic segment, it will compute the portion to be borne by the CMTS segment based on a report on channel-wise CMTS bill collection details to be taken from the PMS. When bill collection charges are paid by Basic segment, the following entries are passed in basic segment books. These are passed at the PMS if commission is configured there as for Post Office or passed manually in the Cash Book when a separate claim for it is received from the channel. A. PMS dealing with/recognizing the bill collection charges: a. Collection charges are deducted and settlement is only for the net amount (Post Office) Bill Collection Charges (substitute actual GL code) Dr. To Claims Recoverable from <Channel> b. When collection charges are computed by PMS although the channel makes a full settlement. Collection Charges will be paid separately by AO (Cash) Bill Collection Charges (Substitute actual GL code) Dr. To TRC Settlement Account When payment is actually made by the AO (Cash) to the channel TRC Settlement Account Dr To Bank/Cash It may be noted that for all transactions passing through the CDR system, AO (Cash) will operate only TRC Settlement Account. 2. Bill collection charges settled outside the CDR system. Bill Collection Charges (Substitute actual GL code) Dr. To Bank/Cash NATFM,HYDERABAD 9

11 In both the above cases another MANUAL Journal Entry will be passed in the EFS as follows: 'CDR Based Claims for bill collection charges recoverable from CMTS' Dr. To Bill Collection Charges (Substitute actual GL code) Cr. A corresponding entry will be passed in the CMTS Segment books to settle this (Exact GL codes to be taken from the GL code list) Bill collection charges Dr To Caims for bill collection charges Payable to Basic Segment CDR Based Claims for share of discount on post-paid bills recoverable from CMTS: This is to deal with discounts given in the ES bills which include bills generated in the CMTS System. The discounts are given on the total ES bill by the Basic Segment. The above GL Code will be used to deal with that part of the discount to be borne by the CMTS system on account of discounts allowed to its bills. Allotment of account codes under Schedule 413 in CMTS segment: Minor account code: Detailed suspense account codes Settlement of CDR based transaction with Basic CDR based claims recoverable from Basic for postpaid account CDR based claims recoverable from Basic for prepaid account NATFM,HYDERABAD 10

12 CDR based TR Remittance Heads Different circle CDR based TR Minor account code- Remittance Different circle (Originating) Detailed account code CDR based TR Remittance Different circle(originating) CDR based TR Remittance Different circle (Responding) CDR based TR Remittance Different circle (Responding) Name of Circle Assam Calcutta Phones Chennai Phones Andhra Bihar Gujrat J & K Karnataka Kerala Madhya Pradesh Maharastra NE I Punjab Orissa Rajasthan Tamil Nadu UP (East) UP (west) West Bengal Haryana Himachal Andaman & Nicobar Chattisgarh Jharkand Uttaranchal NE II CDR based TR Remittance Heads Same circle CDR based TR Minor account code- Remittance Same circle (Originating) CDR based TR Remittance Same circle (Responding) Detailed account code NATFM,HYDERABAD 11

13 Above remittance heads must not be utilized by any Circle for book transfer of any kind of inter-circle and intra-circle transactions other than those for TR transactions (revenue and expense) exclusively generated by CDR based billing system. Allotment of account codes for Post coneection deposits: Minor account code: Detailed suspense account codes Post connection deposits recoverable Post connection deposits under recovery Security deposit recoverable Security Deposit (broadband) recoverable STD PT Deposit recoverable Other deposit recoverable Security deposit under recovery Security Deposit (broadband) under recovery STD PT Deposit under recovery Other deposit under recovery The above detailed account codes will be utilized only by CDR Based billing system at the time of raising invoice for post-connection deposit, collection of such post connection deposits as per invoice and to transfer of such post connection deposits to final account codes related to different types of post connection deposits. The above mentioned account codes will not be utilized for any purpose other than the invoicing, recovery and accounting to final account code of post connection deposits, through CDR based billing system. The CDR based billing system must ensure that at the end of each accounting period and particularly at the end of the financial year the balance under each detailed account code of minor account code are equal to the balance of corresponding detailed account code of minor account code The business process rules as per CDR based billing system, must ensure that the claims raised against the existing subscribers for additional deposits / new type deposits and accounted by CDR based billing system under the account codes mentioned above for post connection deposits are settled within a pre-fixed time frame and no claim raised and accounted under account codes of and can remain unsettled beyond the said pre-fixed time frame and CDR based billing system must neutralize such unsettled claims immediately after the expiry of the said pre-fixed time frame, by passing accounting entries affecting the account code of and corresponding account code of The above account codes must not be utilized for accounting the transactions meant for collections of pre-connection deposits if any, from the prospective customers. Since CDR based billing system is account based billing and not invoice based billing the post connection deposits shall be account based. Therefore, various types of post connection deposits in respect of Basic Segment may be accounted under the following account codes only: OYT Deposits Tatkal Deposits Deposits from STDPT Franchisees Security Deposits for Broadband services NATFM,HYDERABAD 12

14 Security Deposits Others The various types of deposits which are reflected under , , , , , , , , are transferred to account codes / However, in such cases the CDR based billing system shall keep separate information internally about each nature of post connection deposits, which will be clubbed and booked to account code / For the purpose of transferring various type of deposits reflected under , , , , , , , & by CDR based billing system to account code / all concerned circles must reconcile the GL balance under the account codes , , , , , , , , with the sub-ledger / subsidiary records details and pass on the correct information i.e. reconciled full details of such balances to CDR based billing system. The claims / demand notes for pre-connection deposits to be recovered from prospective customers shall be taken care of by the CDR based billing system internally and such claims / demand notes shall not be reflected in the external financial system till such claims / demand notes are paid by the prospective customers and after that it should be booked in the relevant account codes. Allotment of account codes for Refunds: Minor account code: Detailed suspense account codes Refund due to Telephone Subscribers Refund on excess/double payments(existing) Refund due on closed connections. (existing) Refunds due on working connections (new) Refunds due on pre-connection deposits and advances (new) The above-mentioned account codes will be utilized by CDR based billing system for keeping the liability towards the (a) refund due on working connections and (b) refund due on pre-connection deposits & advances. The amount of liability towards refund booked to above-mentioned account codes will be cleared by way of adjustment or otherwise as per sanction issued by the competent authority. 5. Accounting for Invoices and Related Payments All financial data originating in billing are being posted in accounting. In addition, in order to comply with Indian Accounting Standards, manual entries are also posted in accounting especially at the year-end. Accounting requires all the feeds from various systems at a consolidated level for each combination of owning and receiving SSA. NATFM,HYDERABAD 13

15 a. Invoice Generation and Complete Payment in the same SSA Consider a scenario where invoice is generated in Hyderabad and the payment is also made in Hyderabad. 1. On generation of invoice, relevant sundry debtors and recoverable accounts are debited, with appropriate credit being given to the various revenue accounts. 2. Customer makes a payment at a collection centre at Hyderabad. The collection centre updates the PMS about the same through a daily list comprising of collections made by it during the day and that made by the various collection offices that report to it. This will be sent to Accounting, debiting the Claims Recoverable from Others/HPO/Bill Desk account as the case may be, and passing the appropriate credit to TR Collection Account in the books of account of Hyderabad. 3. On receipt of the schedule information and the cheque for the actual payment, TRC Settlement account is debited, passing the credit to Claims recoverable from. Others/HPO/Bill Desk etc. The corresponding entry of debiting the Bank Collection Account and crediting the TRC Settlement Account is done by AO Cash in Cash book of the SSA. Thus the closing of TRC Settlement account is manual. 4. When information is received from Billing System about the payments clearing the Sundry Debtors outstanding, the TR Collection Account is debited, crediting the sundry debtors and other recoverable accounts. Consider that the following invoice is generated: Customer Invoice Fixed charges from subscriber 180 Local Call Charges 500 International Trunk Calls 200 Installation Charges 500 Total 1380 Add Service Tax 166 Education Cess 3 Higher Education Cess 2 Grand Total 1551 Net Payable 1551 NATFM,HYDERABAD 14

16 (Service tax figures in examples are approximate & assumed for easy representation ) The accounting treatment is depicted in the following figure. Invoice in Hyderabad, Payment in Hyderabad Accounting entries on Invoice Generation (In the Books of Hyderabad SSA) Sundry Debtors LL a/c Dr Service Tax Recoverable (Telephones) Dr Education Cess Recoverable Dr Higher Education Cess Recoverable Dr. 2 To Fixed Charges from Subscriber 180 To Local Call Charges 500 To International Trunk Calls 200 To Installation Charges 500 To Service Tax Payable 166 To Education Cess Payable 3 To Higher Education Cess Payable 2 On Receipt of Daily List data from PMS (In the Books of Hyderabad SSA) Claims Recoverable from Others Dr To TR Collection 1551 On Receipt of Schedule data from PMS (In the books of AO Cash) (Outside CDR system) Bank Collection A/c Dr To TRC Settlement A/c 1551 On Receipt of Schedule data from PMS (In the books of Hyderabad SSA) TRC Settlement A/c Dr To Claims Recoverable from Others 1551 On Receipt of payment posting data from Billing (In the books of Hyderabad SSA) TR Collection a/c Dr To Sundry Debtors 1380 To Service Tax Recoverable 166 To Education Cess Recoverable 3 To Higher Education Cess Recoverable 2 Figure 1. Billing and complete payment in the same SSA NATFM,HYDERABAD 15

17 b. Excess/Double Payments when payment is made in the Billing SSA Suppose in the above case, if payment of Rs 2551 is received against the billed amount of Rs 1551,then there is an excess of Rs This will be treated as follow: Excess or Double Payment Accounting entries on Invoice Generation (In the Books of Hyderabad SSA) Sundry Debtors LL a/c Dr Service Tax Recoverable (Telephones) Dr Education Cess Recoverable Dr Higher Education Cess Recoverable Dr. 2 To Fixed Charges from Subscriber 180 To Local Call Charges 500 To International Trunk Calls 200 To Installation Charges 500 To Service Tax Payable 166 To Education Cess Payable 3 To Higher Education Cess Payable 2 On Receipt of Daily List data from PMS (In the Books of Hyderabad SSA) Claims Recoverable DOP/Others/Bill Desk/AOCash/Banks a/c Dr To TR Collection 2551 On Receipt of Schedule data from PMS (In the books of AO Cash) Bank Collection A/c Dr To TRC Settlement A/c 2551 On Receipt of Schedule data from PMS (In the books of Hyderabad SSA) TRC Settlement a/c Dr To Claims Recoverable HPO/Others/Banks/AOCash/Bill Desk 2551 On Receipt of payment posting data from Billing (In the books of Hyderabad SSA) TR Collection a/c Dr To Sundry Debtors (Other than WLL) 1380 To Service Tax Recoverable 166 To Education Cess Recoverable 3 To Higher Education Cess Recoverable 2 To Refund due on Double/Excess Payment 1000 Figure 2. Excess or double payment in the same SSA NATFM,HYDERABAD 16

18 For the invoice considered in the previous section, if an excess payment is accepted, Billing system will have to identify excess payment. As depicted in Figure 3 above, for an invoice of Rs.1551, a payment is received in excess of Rs.1000, that is, Rs So when the TR Collection is cleared by debiting Rs.2551, the exact amount that is enough to clear them, is credited to respective sundry debtors and other recoverable accounts. The excess Rs.1000 is credited to the account of Refund due on Double/Excess Payments. When the next invoice is generated, this excess amount is adjusted by crediting the sundry debtors by the excess amount, as depicted in figure 4 and in the invoice depicted below. Customer Invoice Fixed charges from subscriber 180 Local Call Charges 1000 International Trunk Calls 500 Total 1680 Add Service Tax 100 Education Cess 15 Higher Education Cess 5 Grand Total 1800 Less: Excess payment Adjusted 1000 Net Payable 800 NATFM,HYDERABAD 17

19 Excess or Double Payment Adjustment Accounting entries on Invoice Generation (In the Books of Hyderabad SSA) Sundry Debtors (Other than WLL) a/c Dr Service Tax Recoverable (Telephones) Dr Education Cess Recoverable Dr Higher Education Cess Recoverable Dr. 2 To Fixed Charges from Subscriber 180 To Local Call Charges 500 To International Trunk Calls 200 To Installation Charges 500 To Service Tax Payable 166 To Education Cess Payable 3 To Higher Education Cess Payable Refund due on Double/Excess payment Dr To Sundry Debtors (LL) a/c 950 To Service tax recoverable 45 To Education cess recoverable 3 To Higher Education Cess Recoverable 2 On Receipt of Daily List data from PMS (In the Books of Hyderabad SSA) Claims Recoverable HPO/Banks/AOCash/Others/Bill Desk a/c Dr. 800 To TR Collection 800 On Receipt of Schedule data from PMS (In the books of AO Cash) Bank Collection A/c Dr. 800 To TRC Settlement A/c 800 On Receipt of Schedule (In the Books of Hyderabad SSA) TRC Settlement a/c Dr. 800 To Claims Recoverable Bill Desk/HPOBanks/AOCash/Others 800 On Clearing outstanding by Billing (In the Books of Hyderabad SSA) TR Collection a/c Dr. 800 To Sundry Debtors (LL) 730 To Service Tax Recoverable 55 To Education Cess Recoverable 12 To Higher Education Cess Recoverable 3 Figure 3. Excess or Double Payment Adjustment in the next invoice In case the balance needs to be refunded, the accounting entries will be as depicted in Figure 5. NATFM,HYDERABAD 18

20 Refund of Excess or Double Payment Refund due on Double/Excess Payment Dr To TRC Settlement A/c 1000 Figure 4. Refund of Excess or Double Payment In case of refund for closed/surrendered connections, the following entries are made: Refund for closed/surrendered connections Refund due for closed or surrendered connections Dr To TRC Settlement A/c 1000 Figure 5. Refund for closed/surrendered connections c. Partial Payments made in the Billing SSA This section deals with the accounting treatment of partial payments that is payment made is less than the amount outstanding. If we consider a scenario where bill is generated in Hyderabad for Rs.1130 as shown below. Customer Invoice Fixed charges from subscriber 100 Local Call Charges 500 International Trunk Calls 400 Total 1000 Add Service Tax 100 Education Cess 20 Higher Education Cess 10 Grand Total 1130 Net Payable 1130 A payment of Rs. 565 is received at Collection Centre1, say, a cash counter in Hyderabad The payment received knocks off the debit in relevant sundry debtors and other recoverable heads through a credit entry in proportion to the payment received, as depicted in the figure below. NATFM,HYDERABAD 19

21 Partial Payment Accounting entries on Invoice Generation (In the Books of Hyderabad SSA) Sundry Debtors (LL) a/c Dr Service Tax Recoverable Dr Education Cess Recoverable Dr Higher Education Cess Recoverable Dr. 10 To Fixed Charges from Subscriber 100 To Local Call Charges 500 To International Trunk Calls 400 To Service Tax Payable 100 To Education Cess Payable 20 To Higher Education Cess Payable 10 On Receipt of Daily List data from PMS (In the Books of Hyderabad SSA) Claims Recoverable Bill Desk/HPO/Banks/AOCash/Others Dr. 565 To TR Collection 565 On Receipt of Schedule data from PMS (In the books of AO Cash) (outside CDR) Bank Collection A/c Dr.565 To TRC Settlement A/c 565 On Receipt of Schedule (In the Books of Hyderabad SSA) TRC Settlement a/c Dr. 565 To Claims Recoverable Bill Desk/HPO/ Banks/AOCash/Others 565 On Clearing outstanding by Billing (In the Books of Hyderabad SSA) TR Collection a/c Dr. 565 To Sundry Debtors (LL) 500 To Service Tax Recoverable 50 To Education Cess Recoverable 10 To Higher Education Cess Recoverable 5 Figure 6 Partial payment made in billing SSA NATFM,HYDERABAD 20

22 On generation of next invoice as depicted below, the partial amount outstanding is also reflected. Customer Invoice Fixed charges from subscriber 100 Local Call Charges 500 International Trunk Calls 400 Total 1000 Add Service Tax 100 Education Cess 20 Higher Education Cess 10 Grand Total 1130 Add: Balance from last invoice 565 Net Payable 1695 When the payment is received, the outstanding amounts are credited by the proportional amount, GL Code wise, based on feed received from Billing system. This is depicted in the following figure. Partial Payment Adjustment Accounting entries on Invoice Generation (In the Books of Hyderabad SSA) Sundry Debtors (LL) a/c Dr Service Tax Recoverable Dr Education Cess Recoverable Dr Higher Education Cess Recoverable Dr. 10 To Fixed Charges from Subscriber 100 To Local Call Charges 500 To International Trunk Calls 400 To Service Tax Payable 100 To Education Cess Payable 20 To Higher Education Cess Payable 10 On Receipt of Daily List data from PMS (In the Books of Hyderabad SSA) Claims Recoverable Bill Desk/HPO/Banks/AOCash/Others a/c Dr To TR Collection 1695 On Receipt of Schedule (In the Books of Hyderabad SSA) TRC Settlement A/c Dr To Claims Recoverable Bill Desk/HPO/Banks/AOCash/Others 1695 On Clearing outstanding by Billing (In the Books of Hyderabad SSA) TR Collection a/c Dr To Sundry Debtors (LL) 1500 To Service Tax Recoverable 150 To Education Cess Recoverable 30 To Higher Education Cess Recoverable 15 Figure 7 Partial Payment adjustment in next cycle NATFM,HYDERABAD 21

23 d. Remittance to different SSA, Same Circle (Complete payment) In cases where the SSA where the payment is made is different than the SSA where the Bill has been generated, we need to pass a remittance entry from the revenue receiving SSA to the revenue owning SSA. Accounting System is capable of generating remittance accounting entries for payments received in SSA other than revenue owning SSA. Revenue owning and revenue receiving SSAs can be in different Circles in the same Zone. In order to comply with this requirement it is essential that Billing provides SSA information for revenue at the time of billing as well as information on revenue owning and revenue receiving SSA at the time of payment adjustment against outstanding. In the following figure, a scenario is considered where Invoice is generated in Hyderabad and payment is made in Vizag, that is both SSAs belong to the same circle. On receipt of daily list information by PMS, Claims recoverable from collection centre a/c is debited by the amount received, in the books of accounts of the receiving SSA that is Vizag here, crediting the TR Collection Account. When Schedule information and cheque is received by PMS, TRC Settlement account is debited, thus clearing the outstanding Claims recoverable a/c in the revenue receiving SSA. On payment feed from Billing system, the correct remittance entries are determined and posted. TR Collection Account is debited and Originating Remittance same circle credit entry is made in the books of accounts of revenue receiving, here Vizag. The responding remittance entry in revenue owning SSA (Hyderabad in this case) is used to clear the debtors outstanding and other recoverable accounts in revenue owning SSA. Customer Invoice Fixed charges from subscriber 180 Local Call Charges 500 International Trunk Calls 200 Installation Charges 500 Total 1380 Add Service Tax 166 Education Cess 3 Higher Education Cess 2 Grand Total 1551 Net Payable 1551 NATFM,HYDERABAD 22

24 Invoice in Hyderabad Payment in Vizag Accounting entries on Invoice Generation (In the Books of Hyderabad SSA) Sundry Debtors (Other than WLL) a/c Dr Service Tax Recoverable (Telephones) Dr Education Cess Recoverable Dr Higher Education Cess Recoverable Dr. 2 To Fixed Charges from Subscriber 180 To Local Call Charges 500 To International Trunk Calls 200 To Installation Charges 500 To Service Tax Payable 166 To Education Cess Payable 3 To Higher Education Cess Payable 2 On Receipt of Daily List data from PMS (In the Books of Vizag SSA) Claims Recoverable Bill Desk/HPO/AOCash/Banks/Others Dr To TR Collection 1551 On Receipt of Schedule (In the Books of Vizag SSA) TRC Settlement a/c Dr To Claims Recoverable Bill Desk/HPO/ AOCash/Banks/Others 1551 On Receipt of Schedule (In the Books of AO (Cash) Vizag SSA) Bank Collection a/c Dr To TRC Settlement A/c 1551 On Clearing outstanding by Billing (Automatically generated by system) TR Collections Dr Vizag To Remittance same Circle (O) 1551 Vizag On Clearing outstanding by Billing (In the Books of Hyderabad SSA based on feed from Billing system) Remittance same circle (R) Dr To Sundry Debtors (LL) 1380 To Service Tax Recoverable 166 To Education Cess Recoverable 3 To Higher Education Cess Recoverable 2 Figure 9 Remittance to different SSA in same circle NATFM,HYDERABAD 23

25 e. Remittance to SSA of Same Circle (Partial Payment) This section deals with the accounting treatment of a scenario of Partial payment made in some other SSA of the same circle in which invoice has been generated. Consider a scenario where Bill is generated in Hyderabad (AP Circle) and payment is made in Vizag (AP Circle). Consider the bill to be the following: Customer Invoice Fixed charges from subscriber 100 Local Call Charges 500 International Trunk Calls 400 Total 1000 Add Service Tax 100 Education Cess 20 Higher Education Cess 10 Grand Total 1130 Net Payable 1130 The accounting treatment of the same will be as depicted in the figure below. NATFM,HYDERABAD 24

26 Partial Payment Different SSA same Circle Accounting entries on Invoice Generation (In the Books of Hyderabad SSA) Sundry Debtors (LL) a/c Dr Service Tax Recoverable Dr Education Cess Recoverable Dr Higher Education Cess Recoverable Dr. 10 To Fixed Charges from Subscriber 100 To Local Call Charges 500 To International Trunk Calls 400 To Service Tax Payable 100 To Education Cess Payable 20 To Higher Education Cess Payable 10 On Receipt of Daily List data from PMS (In the Books of Vizag SSA) Claims Recoverable Bill Desk/HPO/AOCash/Banks/Others A/c Dr. 565 To TR Collections 565 On Receipt of Schedule (In the Books of AO (Cash) Vizag SSA) Bank Collection a/c Dr. 565 To TRC Settlement A/c 565 On Receipt of Schedule (In the Books of Vizag SSA) TRC Settlement a/c Dr. 565 To Claims Recoverable Bill Desk/HPO/ AOCash/Banks/Others 565 On Clearing outstanding by Billing TR Collections Dr. 565 Vizag To Remittance same Circle (O) 565 Vizag On Clearing outstanding by Billing (In the Books of Hyderabad SSA) Remittance same Circle (R) Dr. 565 To Sundry Debtors (LL) 500 To Service Tax Recoverable 50 To Education Cess Recoverable 10 To Higher Education Cess Recoverable 5 Figure 10 Remittance to different SSA in same Circle (Partial Payment) When Billing sends a payment feed to accounting, the correct remittance entries are used to settle the recoverables by proportional amount as posted by the Billing System. The next bill is depicted as follows: NATFM,HYDERABAD 25

27 Customer Invoice Fixed charges from subscriber 100 Local Call Charges 500 International Trunk Calls 400 Total 1000 Add Service Tax 100 Education Cess 20 Higher Education Cess 10 Grand Total 1130 Add: Balance from last invoice 565 Net Payable 1695 The accounting treatment of the same is depicted in the following figure. NATFM,HYDERABAD 26

28 Partial Payment Adjustment (different SSA same Circle) Accounting entries on Invoice Generation (In the Books of Hyderabad SSA) Sundry Debtors (LL) a/c Dr Service Tax Recoverable Dr Education Cess Recoverable Dr Higher Education Cess Recoverable Dr. 10 To Fixed Charges from Subscriber 100 To Local Call Charges 500 To International Trunk Calls 400 To Service Tax Payable 100 To Education Cess Payable 20 To Higher Education Cess Payable 10 On Receipt of Daily List data from PMS (In the Books of Vizag SSA) Claims Recoverable Bill Desk/HPO/ AOCash/Banks/Others Dr To TR Collections 1695 On Receipt of Schedule (In the Books of AO (Cash) Vizag SSA) Bank Collection a/c Dr 1695 To TRC Settlement 1695 On Receipt of Schedule (In the Books of Vizag SSA) TRC Settlement a/c Dr To Claims Recoverable Bill Desk/HPO/ AOCash/Banks/Others 1695 On Clearing outstanding by Billing (Automatically generated) TR Collections Dr Vizag To Remittance same Circle (O) 1695 Vizag On Clearing outstanding by Billing (In the Books of Hyderabad SSA) Remittance same Circle (R) Dr To Sundry Debtors (LL) 1500 To Service Tax Recoverable 150 To Education Cess Recoverable 30 To Higher Education Cess Recoverable 15 Figure 81 Remittance to different SSA in same Circle (Partial Payment Adjustment) NATFM,HYDERABAD 27

29 f. Remittance to different SSA of same Circle (Excess Payment) Excess or Double Payment Different SSA same Circle Accounting entries on Invoice Generation (In the Books of Hyderabad SSA) Sundry Debtors (Other than WLL) a/c Dr Service Tax Recoverable (Telephones) Dr Education Cess Recoverable Dr Higher Education Cess Recoverable Dr. 2 To Fixed Charges from Subscriber 180 To Local Call Charges 500 To International Trunk Calls 200 To Installation Charges 500 To Service Tax Payable 166 To Education Cess Payable 3 To Higher Education Cess Payable 2 On Receipt of Daily List data from PMS (In the Books of Vizag SSA) Claims Recoverable Bill Desk/HPO/ AOCash/Banks/Others Dr To TR Collections 2551 On Receipt of Schedule (In the Books of AO Cash Vizag SSA) Bank Collection A/c Dr To TRC Settlement A/c 2551 On Receipt of Schedule (In the Books of Vizag SSA) TRC Settlement a/c Dr To Claims Recoverable Bill Desk/HPO/ AOCash/Banks/Others 2551 On Clearing outstanding by Billing (Automatically generated) TR Collections Dr Vizag To Remittance same Circle (O) 2551 Vizag On Clearing outstanding by Billing (In the Books of Hyderabad SSA) Remittance within Circle (R) Dr To Sundry Debtors (LL) 1380 To Service Tax Recoverable 166 To Education Cess Recoverable 3 To Higher Education Cess Recoverable 2 To Refund due on Double/Excess Payment 1000 Figure 9 Remittance to different SSA in same circle (excess payment) The accounting treatment here is similar to that where excess payment is made in the owning SSA itself as depicted in some other Section earlier. The only difference being in remittance entries. NATFM,HYDERABAD 28

30 g. Remittance to SSA of different Circle (Full Payment) Invoice in Hyderabad Payment in Bangalore Accounting entries on Invoice Generation (In the Books of Hyderabad SSA) Sundry Debtors (Other than WLL) a/c Dr Service Tax Recoverable (Telephones) Dr Education Cess Recoverable Dr Higher Education Cess Recoverable Dr. 2 To Fixed Charges from Subscriber 180 To Local Call Charges 500 To International Trunk Calls 200 To Installation Charges 500 To Service Tax Payable 166 To Education Cess Payable 3 To Higher Education Cess Payable 2 On Receipt of Daily List data from PMS (In the Books of Bangalore SSA) Claims Recoverable Bill Desk/HPO/Others Dr To TR Collections 1551 On Receipt of Schedule (In the Books of AO Cash BLR SSA)(Manual Entry Outside CDR) Bank Collection A/c Dr To TRC Settlement A/c 1551 On Receipt of Schedule (In the Books of BLR SSA) TRC Settlement a/c Dr To Claims Recoverable Bill Desk/HPO/Others 1551 On Clearing outstanding by Billing (Automatically generated) TR Collections Dr BLR To Remittance between circles AP (O) 1551 BLR On Clearing outstanding by Billing (In the Books of Hyderabad SSA) Remittance between circles Karnataka(R) Dr To Sundry Debtors (LL) 1380 To Service Tax Recoverable 166 To Education Cess Recoverable 3 To Higher Education Cess Recoverable 2 Figure 10 Remittance to an SSA in different circle (full payment) NATFM,HYDERABAD 29

31 In the previous figure, a scenario is considered where Invoice is generated in Hyderabad and payment is made in Bangalore, that is both SSAs belong to different circles in the same zone. On receipt of daily list information by PMS, Claims recoverable from collection centre a/c is debited by the amount received, in the books of accounts of the receiving SSA that is Bangalore here. TR Collection Account is credited by the same amount. When Schedule information and cheque is received by PMS, TRC Settlement account is debited, thus clearing the outstanding Claims recoverable from CC(HPO/Bill Desk/Others) a/c in the revenue receiving SSA. On payment feed from Billing system, TR Collection account is debited, The corresponding originating Remittance credit entry is made in the books of accounts of receiving SSA. The responding remittance entry is used to clear the debtors outstanding and other recoverable accounts in revenue owning SSA. The remittance account used here is Remittance between circles. h. Surcharge on delayed payments (Late fee) Surcharge on delayed payments is created as an adjustment in Billing system. So when the adjustment is created the following entries are passed to accounting module: Sundry Debtor (LL) Dr To Surcharge on Delayed Payments(Late fee) 1000 Figure 11: Surcharge on delayed payments(late fee) 6. Accounting for GSM Collections a. GSM Invoice of one Circle, Payment in SSA of same Circle Consider a scenario where for a GSM Invoice belonging to Punjab Circle, a payment of Rs is accepted in an SSA (Ludhiana) of the same Circle. On receipt of feed file from PMS for Daily list, the amount and the receiving SSA is recognised, with a flag for Collections for GSM. At this time itself, the accounting entries are passed to debit Claims recoverable from Others and passing correct remittance entries because in this case there is no clearing feed obtained from Billing System in this case. On receipt of information at the time of schedule, TRC settlement account is debited and Claims recoverable account is credited. Invoice in Punjab Circle Payment at Ludhiana (Punjab Circle) (Full Payment) I. On Receipt of Daily List data from PMS with a flag for GSM Payments Particulars Dr Cr Books Claims Recoverable from Others A/c 5000 LDH To Claims Payable to CMTS 5000 LDH II. On Receipt of Schedule data from PMS (IN THE BOOKS OF Ludhiana SSA) Particulars Dr Cr Books TRC Settlement Account 5000 LDH To Claims Recoverable from Others 5000 LDH Figure 15: Accounting for GSM Collections: Payment in SSA of same Circle NATFM,HYDERABAD 30