Financial Periods
Like most packages, Panacea is able to "age" the balance on an account.
This involves placing the unpaid invoices on the account under the headings
Current, 30 days, 60 days and so on.
This function allows the user to judge how long the account has been unpaid and
is used extensively throughout Panacea.
Here are some examples of where Panacea uses ageing:
In order for Panacea to be able to calculate the ageing of an account it needs
to be able to "group" transactions into the catagories mentioned above:
Current, 30 days, 60 days etc.
Unsophisticated packages tend to use the transaction date for this purpose, but
this has a number of drawbacks - many of which would make your accountant
unhappy. In order to solve these
problems Panacea uses Financial periods.
The relationship between Financial Periods and Generating Statements
As the catagories would suggest (Current, 30 days,
60 days) financial periods tend to follow calendar months.
More to the point, they MUST follow your statement printing dates.
The reason for this is simple: when a patient first comes to your practice their
charge should reflect on their first statement under Current.
This same charge (if unpaid) should reflect under 30 days on their
next statement, and so on. You would not want a patient's statement to
reflect his first charge under 30 days, or for his Current
amount to jump to 60 days on his second statement. For this
reason, financial periods should be "aligned" with statement printing dates.
The good news is that most of this is automatic. Panacea automatically
creates financial periods. When you have finished
generating statements
Panacea offers to start the next financial period. This effectively aligns
your financial periods with your statement printing dates.
It is important to note that Financial Periods do not necessarily
align with calendar months. For example, if you print your statements on
the 25th of the month, then your Financial Period should end on
the 25th. When Panacea creates new financial periods it names them
according to calendar months for simplicity, e.g. February 2011.
Technically, though, the February 2011 financial period could start on 26
January 2011 and end on 25 February 2011. Don't worry about this, the
naming is a "loose" description. Besides, you can rename the periods if
you really want to: see
Financial Periods tab
.
Financial Periods and Transactions
When capturing an
invoice
,
payment or other transaction
Panacea will automatically select the correct
financial period based on the transaction date. In general, therefore, you
don't need to think too much about financial periods.
However, let's say you forgot to capture an invoice on a particular account
before you printed statements. You want to capture the invoice with the
correct date but you have now moved into the next financial period, meaning that
the invoice will reflect under 30 days instead of Current.
Panacea allows you to specify the financial period manually on the
Other tab
. Simply check the Manually set period
checkbox
and set the period to the current period. Similarly throughout Panacea
you are able to set the financial period of a transaction, giving you complete
control over ageing of balances.
Financial Periods and Reporting
Financial periods are also used extensively in Panacea's reports. For
example, the
Transaction Analysis Report
allows you to select a From
Period and To Period. Accountants and bookkeepers tend to
prefer working with financial periods rather than date ranges because it allows
them to "close off" a period once it has been dealt with. Once a period
has been "closed off" no changes should be made in that period. To
illustrate the point, let's say a
Transaction Analysis Report
is used to calculate the
VAT payable to SARS on your VAT return. Strictly speaking you should not
make any adjustments to transactions in that period afterwards, otherwise your
figures will not reconcile at the end of the year. All adjustments should
be made in the current period. Speak to your accountant if you require
further clarity on this.
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