Adjusting a Bill

Problem:  The vendor has revised a prior utility bill and has included the adjustments in the current month's bill.  What’s the best way to handle this in EnergyCAP?

Solution:  There is no single method; the best way to revise prior bills depends upon several factors.  Three methods are discussed below.

1. Edit the original bill:

The quickest and simplest way to revise a prior bill is just to edit it.  When doing so, you can:

1. Add a one line bill message (yellow icon at upper left).
2. Add an explanation using the account memo (white icon at top of bill entry screen).
3. Create an explanatory issue tracker record (yellow icon at upper center).
   
   

Advantage of editing the original bill:  

The revision is made in the proper month, so bill history is accurate and therefore there will be no adverse impact on the accuracy of future forecasting, budgeting, audits or cost avoidance – all of these functions use bill history as a basis for ‘expected’ consumption and cost.

Disadvantages of editing the original bill:  

1. Reports that you have already prepared and distributed will be out-of-date. 
2. If you interface EnergyCAP with accounts payable, the edited bill no longer reflects what was actually sent to A/P at the time (hence the need for a memo as discussed above). More importantly, the bill that will flow from EnergyCAP to A/P today has to reflect the net amount due to the vendor today.  For example, if today’s bill is for a net of $10,000 ($15,000 of electricity consumed this month and a $5,000 credit for a prior month) you want to pass a $10,000 transaction to A/P, not a $15,000 transaction.  The vendor has “trued up” your account on today’s bill so you have to do likewise.

2. Make the correcting entry in the current bill.  

Leave the original bill (last month) untouched; true up the account by making an adjustment in the current bill. A good way to do this is to build a cost and usage adjustment line item in each template.  The adjustment may be recorded using this line item whenever you receive a cancel/rebill or other vendor adjustment.

Advantages of correcting the current bill:  

The correct transaction will flow to A/P and EnergyCAP will be ‘synchronized’ with vendor records.  Year-to-date energy use and cost will be correct.

Disadvantages of correcting the current bill: 

Individual monthly energy use and cost will not be correct.  (Example:  Last month shows values that are too high due to vendor overcharge; this month shows values that are too low due to correction.)  Future forecasts, budgets, audits and cost avoidance reports that use this data will be skewed although year-to-date values will normally be accurate.

3. Create an adjustment bill.  

Instead of showing the adjustment on today’s bill, enter today’s bill as the gross amount (the actual cost and consumption not including the adjustment) and then create a second bill that includes just the adjusted cost and consumption.  If a credit, these values will be negative.  This adjustment bill can use the dates and billing period of today’s bill (if you want to track the adjustment this month) or you can use prior dates and billing periods in order to reflect the adjustment in the proper month.  Click here for How to do Bill Adjustments.

Advantages of an adjustment bill:  

1. Good audit trail
2. Flexibility as to which billing period will reflect the adjustment
3. If you interface with A/P, both bills will flow to A/P and the net amount due to the vendor will be correct. However,be sure your A/P system can handle two transactions for the same vendor and create payment for the net amount.

Disadvantages of an adjustment bill:  

A bit trickier to do since two bills will be created. 

The bill adjustment feature in EnergyCAP is designed to help make adjustments to bills which have already been entered and saved.  The process involves the creation of two transactions as a result of the adjustment – a credit bill and a debit bill.  The adjustment can include one or all of the line items from the bill being adjusted.  Also, the GL, Accounting Period, and Control Code values can be modified for the adjustment bills.

How to Create Adjustments for a Bill

! Before making bill adjustments, please contact your EnergyCAP System Administrator to determine if creating Bill Adjustments will have any impact on financial system interfaces such as accounts payable.  You will need a good understanding of how these interfaces are set up in order to complete a successful bill adjustment. !

• If you use Batch Mode you will need to create an open batch to use the Bill Adjustment option (See Work Flow Manager for more information on Batch Mode).

• Go to Work Flow Manager and click on the Open/Close Batch button  to create a batch if you do not have one currently open.

! The name of the batch may be important since some financial system interfaces require a certain naming convention for bills intended to be paid (for accounting system purposes external to EnergyCAP) and those intended for internal adjustments (for reporting purposes in EnergyCAP) !

NOTE: You can only create bill adjustments for SAVED bills.

• Edit the bill, either from the Account Manager or the Work Flow Manager as follows:

• Highlight the bill to be adjusted from the Account Manager > Bills tab and access the edit window (Bill/Edit or right-click popup menu) OR

• highlight the bill to be adjusted in the Work Flow Manager module and access the edit window (Bill/Edit or right-click popup menu)

• From the Bill Entry / Edit window, click on the wrench icon  in the upper-right corner of the edit window. the Line Item Adjustments window will open.

• The Line Item Adjustments window is divided into four different regions:

1. Source Bill Information: Contains details about the source bill being edited.

2. Target Account / Meter: Used to select a target account and meter OTHER than the current Account / Meter to create the adjustments to.

3. Modify GL, Accounting Period, and Control Code on Adjustments: Contains the options for changing the adjusted bills’ values for these fields.

4. Source (original bill) and Target (adjusted) Bill Line Items: Contains the line items that will be used to create the adjusted bills.

• If necessary, update the values in the Target Account / Meter section to reflect the changes in the new bill.  If the adjustments need to be made to an account other than the current account, click on the Find Account button.  If the adjustments need to be made on the same account, but a different meter, click on the drop-down arrow and select the meter the adjustments are to be made on.  If the adjustments are being made to the same account /meter, leave these values alone.

• If necessary, update the G/L Record or Accounting Period Options.
  NOTE: G/L Record Options affect ONLY the adjustment bill for the target Account/Meter.
  

• Use Target Meter G/L: This option will use the G/L Record (if any) assigned to the target Account/Meter as the G/L for the adjustment bill created for the target Account/Meter.

• Same as Original Bill: This option will use the G/L Record (if any) from the source bill as the G/L for the adjustment bill created for the target Account/Meter.

• Leave G/L Record Blank: This option will simply not assign a G/L Record for the adjustment bill created for the target Account/Meter.

• Use this G/L Record: This option allows for ANY G/L Record in EnergyCAP to be assigned to the adjustment bill created for the target Account/Meter.

• Account Period Options: Affects the adjustment bills for the target and source Account / Meter

• Leave Account Period Blank: This option will leave the Account Period blank for the adjustment bill created for the target Account/Meter as well as the adjustment bill created for the source Account/Meter.

• Same as Original Bill: This option will use the Account Period (if any) from the source bill for the target Account/Meter as well as the adjustment bill created for the source Account/Meter.

• Use this Period and Year: This option allows for ANY combination of Account Period and Year to be used for the target Account/Meter as well as the adjustment bill created for the source Account/Meter.

• Control Code: Affects the adjustment bills for the target and source Account / Meter as well as updates the Control Code on the original source bill

• New Control Code / Comment: The value placed here will be used for the target Account/Meter as well as the adjustment bill created for the source Account/Meter.  Changes here will also update the value(s) in the original source bill.

• In the Source and Target Bill Line Items section, select the line items from the source bill that need to be adjusted.

  • To move all line items from Source Bill Line Items to Target Bill Line Items, click on the   button.

  • To clear all line items from Target Bill Line Items, click on the   button.

  • To move one line item at a time from Source Bill Line Items to Target Bill Line Items, click on the value you want to move and then click on the  button.

    
    NOTE: Any line item can be "copied" multiple times to the Adjustment Values pane.

• As values are moved into Target Bill Line Items, the values for each item will appear in red text.  By default, the adjustment will include the entire amount, therefore effectively zeroing out the original source bill.  Be sure to edit the values to the correct amounts.

• Verify all the values you have entered in the Line Items Adjustments dialog box, and click the Create Adjustment Bills button...

  

  ... to save the Adjustment Bills (the credt bill for the original bill and the debit bill reflecting the
  Adjustment(s).

• If you wish to cancel your changes instead, click on the Exit Without Saving button. 

• You will be returned to the Bill Edit window.  Close this window by clicking on the Close button.