Standard Procedures for Groups
This topic explains the standard procedures for setting up, using, and calculating your profit for groups. This is one large topic rather than multiple small topics so that you can easily print it all if necessary. If you prefer not to print it, you can scroll through it or click the links below to jump to a specific section.
The first section is Before You Begin. The next section is Procedure Overview for Processing Groups, which gives you a step-by-step overview of how to process groups.
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3. Write Checks |
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11. Print Reports |
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Before You Begin
Before you begin using group functionality, you might want to set up a group location, a group non-air revenue type, and group customer accounts to assist in tracking and reporting. You can also configure the charts that group transactions post to.
Group Location
You can track group activity in the general ledger by using a booking location / general ledger branch as a cost center for group transactions only. You will also be able to use all reports to track group activity, because you can run most reports for a specific location.
To do this, add the location in Branch & STP Locations. Then, always use the booking location override in PNRs and enter that location when you invoice transactions, and enter checks and receipts (bank location).
Group Revenue Types
You can track non-air group activity in the general ledger by using a revenue type for non-air group sales only, for example, revenue type G – group tours. In the general ledger, you would look at 7096 (sales for revenue type G).
To set up a group non-air revenue type, use the System Travel & Customer Types function to add a revenue type. Adding a revenue type necessitates updating the chart of accounts and table processing. For more information, see Maintaining Revenue Types.
After you add a revenue type use the revenue type override in PNRs and enter the group non-air revenue type when you invoice transactions.
With groups you can base your profit on commission (known as Retail groups in GlobalWare), or you can purchase a package from providers and resell it to customers at a profit (known as Group in GlobalWare).
This section explains the standard procedure for handling products you have purchased from a provider and are reselling. For all accountable transactions, this section shows examples of what GlobalWare would post to GL.
The examples assume accrual accounting with two payments. Air tickets are included in the package. Revenue Type G is used for non-ARC transactions (sales post to 7096).
Group Deposits and Payables Charts
Payments in and out (receipts and checks) for true groups post to the Group Deposits chart. Manual payables and the application of group credit card payments post to the Group Payables chart.
The Group Payables chart is configured in System Control. The default is 2521. You can change this, but do not change it after you have started using it.
The Group Deposits chart is the chart that is configured for GAA (group, ARC, air) in the Processing Table. The default is 2521. You can change this but do not change it after you have started using it. Also, if you change it, you must change all other processing table entries for sale type G.
Service Fees for True Groups
With true groups, you set the purchase price. Therefore, service fees are not necessary and group accounting (sale type G) does not handle service fees. If you need for some reason to invoice separate service fees, they must be invoiced as retail ARC (for example, RAF), or GAF/M (group, ARC, revenue type M or F) to be handled correctly on the Payments In/Out report. The Processing Table does not include an entry for GAF or GAM. If you add it, it must have the same AR and AP entry as GAU.
Procedure Overview for Processing Groups
The following step-by-step procedural overview explains how to process groups.
1. Set Up the Group
Before you enter invoice PNRs and enter transactions for a group, you set up the group with Group Maintenance. Skipping this step or performing it at a later date can create more work for you. If you interface transactions before creating a group, GlobalWare stores it with a Sale Type R, for retail. If you then create the group as a Sale Type G, you will need to edit the Sale Type for every transaction created for the group.
You can also set up a profile for the group in your reservation system. A group profile is recommended, particularly for groups with numerous options, remarks, hotel dates and rooming codes, and so on.
Negotiate with the providers the cost of their services (what you need to pay). Then, determine the price of the package (what you will charge).
The examples use the following information. Tickets are included in the package price.
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Number of packages: |
10 |
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Individual package price: |
$2,000 |
($500 deposit, $1500 final payment) |
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Total due the provider: |
$10,000 |
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Total ticket cost: |
$2,000 |
(per ticket, base fare = $200, tax = $20, commission = $20) |
The total agency cost is $12,000. The break-even point is 6 packages (6 * 2000 = 12,000). Any additional packages sold are profit.
2. Set Up Payables
It is recommended that you enter the group payables as soon as you know what you owe the providers. Record the entire payable amount. If the provider requires only a deposit, you can write the check for that amount, and the rest remains an open payable until you pay the rest.
You might also need to enter expense payables (for example, if you incur advertising costs for the group).
Use Group Adjust to add a payable in the amount that you owe the provider. GlobalWare posts the following:
Group Deposits (2520)
Group Payables (2521)+10000
-10000
Creating group payables is not absolutely required. If you do not create group payables, you can write checks to GL and include the group ID in the offset grid. The net effect in the general ledger is the same and the Payments In/Out report available funds will match the general ledger. However, the Payments In/Out report payments and payables will not match.
3. Write Checks
After you create the payables, you can write checks.
If you plan to allow plastic payments, you should write the check for the minimum amount due. Credit card payments will be applied to the group payable and will reduce the amount you owe the provider. In effect, you pay the provider partially by agency check and partially with customers' credit card payments.
After you print the check (or record a manual check), GlobalWare posts the following:
Group Payables (2521)
Bank (1010)+10000
-10000
After the check is applied to the payable, the open (current) amount of the payable is $9,000.
4. Enter Customer Payments
On a daily basis, agents enter PNRs for the group passengers.
The agents use the /Q and Paid field to set up the payment schedule that includes any deposits and final payment. The Interface then stores the payment schedule in GlobalWare as invoice items.
The /Q and /QA provide the amount due from customers, and the PAID lines (or payments entered in GlobalWare) provide the amount paid on travel statements.
Notes:
- Do not enter commission on non-air group sales. Post Invoices will not post commissions on groups with a break-even point.
- Front-room agents need to enter a payment schedule so that the Payments In/Out Report can calculate profits based on payments made.
- If you do not have a payment for a sale, invoice it as form of payment R (receivable); for example, if the customer plans to pay on credit card and you are not merchanting, do not invoice with form of payment P unless the customer is paying at that time. Do not forget to explain this to front-room agents.
- Each party has a primary contact. This person's name displays on the travel statements. The Interface designates the first passenger in a PNR as the primary contact, so agents should enter the person who should be the primary contact as the first passenger in the PNR.
5. Interface and Post Invoices
- Run the Interface.
- Edit transactions, print reports, and perform Post Invoices as you always do.
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Post Invoices posts AR, cash, and agency plastic invoices to the general ledger as follows:
Group Deposits (2520)
AR (1510)-500
+500 -
Post Invoices posts credit card invoices to the general ledger as follows:
Group Deposits (2520)
Provider unapplied funds (2045)-500
+500
6. Apply Group Credit Card Payments
A group credit card invoice with Settlement type Invoice creates a credit card payment. Apply this transaction to the manual payable with the Group Adjust function.
GlobalWare posts the following to the general ledger:
Provider Unapplied Funds (2045)
Group Payables (2521)-500
+500
7. Print Statements
You might want to print a travel statement after the client makes a payment. The statement shows a payment of $500 and amount due of $1500 (sale of $2000 less the payment of $500).
You should generate the Exception List and correct any problems before you print travel statements to ensure the accuracy of these reports.
8. Enter Cash Receipts
Enter group-related cash receipts and agency plastic payments with the Get Cash Receipts option in Bank Deposit. For example, when a customer makes a payment for a deposit charged to AR, GlobalWare posts the following to General Ledger.
AR (1510)
Bank (1010)-500
+500
Note: Payments and checks will not appear on statements, customer transaction report, and payments in/out report until they have been applied to group transactions. On account and unapplied payments and checks are not included on these reports.
9. Enter Cancellations and Refunds (Before Final Sale)
You need to refund and cancel passengers if passengers cancel the trip or part of the trip or if the provider reduces the price.
Cancel the Entire Trip
If a passenger cancels the entire trip, you should refund any invoices that have been paid by the customer, cancel the passenger by using the Passenger Maintenance function, and void any other invoices. For example, if the deposit was cash, receivable, or agency plastic, Post Invoices will post the following to the general Lledger:
Group Deposits (2520)
AR (1510)+500
-500
If the form of payment is P, Post Invoices posts to the following to the general ledger:
Group Deposits (2520)
Provider Unapplied Funds (2045)+500
-500
Apply this transaction to the deposit (if you applied the deposit to the manual payable, you will need to unapply the deposit first).
Cancel Part of a Trip
If a passenger cancels part of the trip (for example, an option), you do not need to refund at all unless the deposit covered more than the cost of the rest of the trip. If the passenger has paid more, enter a partial refund.
For example, if a customer has paid $500 on a $2000 trip and cancels a $100 option, you do not need to refund; instead, you reduce the final payment, for example, from $1500 to $1400. If the customer has paid $2800 on a $3000 trip and cancels a $500 option, you need to refund $300.
You might also need to edit the passenger record to remove the canceled option. Use Passenger Edit in Passenger Maintenance to make the change.
Reduction in Cost
You would handle a reduction in the price of the package as you would cancellation of part of the trip: Refund the passenger if you have collected more than the new price.
10. Write Refund Checks
After you enter refunds, print or enter the refund checks and edit the final payment. GlobalWare posts the following to the general ledger:
AR (1510)
Bank (1010)+500
-500
Note: Always refund, rather than void, an invoice item that a customer has paid. Refunding an invoice item ensures that on group reports you can follow what occurred with the transaction.
11. Print Reports
As passengers sign up for the group, print reports for internal management and for providers and tour escorts. For a description of these reports, see Group Functions.
You should generate the Group Exception List and correct any problems before you print reports to ensure the accuracy of these reports.
12. Invoice Final Payments
Agents invoice the final payments received in the front room through the interface.
13. Interface and Post Invoices
Run the Interface, edit transactions, print reports, and perform Post Invoices as you always do. Post Invoices posts the sale and final payment to the general ledger.
If the form of payment is R, A, or C, Post Invoices posts the following to the general ledger:
Group Deposits (2520)
AR (1510)
Sales (7096)
Contra Sales (7990)-1500
+1500
-2000
+2000
14. Apply Cash and Credit Card Payments
Use Bank Deposit to record cash and checks and Get CC Payments in Group Adjust to record group credit card payments.
GlobalWare posts checks and cash as follows:
AR (1510)
Bank (1010)-1500
+1500
For the customer paying by credit card, the final payment was interfaced with FOP R. You apply the credit card payment for the final payment due to both the customer receivable and the provider payable. You also apply the credit card payment for the ARC ticket to the final payment receivable, because the air is included in the package price.
The credit card final payment posts as follows to the general ledger:
Customer unapplied funds (2040)
Provider unapplied funds (2045)-1280
+1280
Applying it to the customer receivable posts as follows to the general ledger:
AR (1510)
Customer unapplied funds (2040)-1280
+1280
Then, apply the credit card payment to the group payable. GlobalWare posts the following to the general ledger:
Provider Unapplied Funds (2045)
Group Payables (2521)-1280
+1281
The credit card payment for the ARC ticket posts as follows to the general ledger:
Customer unapplied funds (2040)
Group Deposits (2520)-220
+220
Applying it to the customer receivable posts as follows to the general ledger:
AR (1510)
Customer unapplied funds (2040)-220
+220
The credit card payment is $1280 because the customer plans to pay for the ticket on credit card also. The ticket amount is $220; 1500 (the final payment amount due) - 220 = 1280.
15. Print Airline Tickets
Print the other airline tickets.
16. Interface and Post Invoices
The Interface stores the transaction for the ticket with revenue type A if the group was set up with air included or U if it was not. The Interface updates the routing in the Group Segments table if there were any changes.
Post Invoices posts the following for the plastic ARC sale:
AP ARC (2010)
Group Deposits (2520)+20
-20
If form of payment is receivable or plastic, post Invoices posts the transaction to the general ledger as follows:
Group Deposits (2520)
AP ARC (2010)+200
-200
You might want to print another travel statement after the client makes the final payment.
17. Enter Cancellations and Refunds After the Final
If a passenger cancels part or all of a trip after you invoice the sale, you need to record a refund.
If a passenger cancels the entire trip, you should refund the non-ARC invoice items and cancel the passenger by using the Passenger Maintenance function. If the trip included airline tickets, refund the ARC sale also. Use the same revenue type when refunding the ARC sale.
If the form of payment is R, C, or A, Post Invoices posts the following for the non-ARC refund:
Group Deposits (2520)
AR (1510)
Sales (7096)
Contra Sales (7990)+2000
-2000
+2000
-2000
If the form of payment is P, Post Invoices posts the following for the non-ARC refund:
Group Deposits (2520)
Provider Unapplied Funds (2045)
Sales (7096)
Contra Sales (7990)+2000
-2000
+2000
-2000
If you have not applied the credit card payment to the group payable, apply the credit card payment from the sale to the credit card payment from the refund. If you have applied, apply the check to the provider to the group payable and the credit card payment for the refund.
Post Invoices posts the following for the ARC refund (revenue type A):
AP ARC (2010)
Group Deposits (2520)+200
-200
If a passenger cancels part of the trip (for example, an option), enter a partial non-ARC refund. You might need to edit the passenger record to remove the canceled option.
18. Write Refund Checks
After you enter and close out refunds, record the refund checks for refunds. GlobalWare posts the following to the general ledger:
AR (1510)
Bank (1010)+2000
-2000
Note: Always refund rather than void an invoice item that a customer has paid. Refunding an invoice item ensures that on group reports you can follow what occurred with the transaction.
19. Record the ARC Draft
After you receive the report from ARC, record the ARC draft with G/L check option in Write Individual Checks. GlobalWare posts the following to the general ledger for the eight tickets. (Two passengers canceled, one in step 9 and one in step 14. For seven cash tickets you owe $1,400, less $20 for the commission on the credit card ticket.)
AP ARC (2010)
Bank (1010)+1380
-1380
20. Make Final Payment to the Provider
If you still owe the provider, make the final payment for the open amount. The final payment is the payable less any checks you have written, less any plastic payments you have forwarded to the provider.
In Group Adjust, make sure you have applied all credit card transactions to the manual payable before you print or record the check.
GlobalWare posts the check amount as follows to the general ledger ($10,000 voucher - $1,000 check - $500 credit card deposit - $1,280 credit card final payment):
Group Payables (2521)
Bank (1010)+7220
-7220
21. Close Out the Group
After you have collected all payments and the group has traveled, close out the group.
Note: You should wait at least a month or two before purging the group to make sure that you have recorded all transactions because transactions could occur after the group has traveled. For example, you might receive a check from an operator for funds not used, or you might need to refund a customer.
First, print the Payments In/Out Report for the group. The Available Funds should match the amount in Group Deposits for the group. Then, you would make the following journal entry:
Group Deposits (2520)
Revenue (4096)+4400
-4400
Post the profit into a revenue account, so that the profit shows on profit and loss statements.
Now you can purge the group, which removes the group and passenger information from the GT tables (this does not affect invoices).
Group Balances in the General Ledger
The following table shows how each group transaction affects the balance in the GL accounts. The steps match the steps in this section. Steps that do not affect accounting (for example, printing reports) are not listed.
| Balance in the General Ledger | |||||||||
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| Step | Acct | 2520 | 2521 | 1010 | 1510 | 2010 | 2040 | 2045 | |
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2. Set up payable |
2520 |
+10000 |
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3. Check to provider |
2520 |
+1000 |
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4. Enter receipts |
1010 |
+4500 |
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5.
Post invoices |
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6. Apply CC pmts |
2521 |
-500 |
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8. Refund deposit |
2520 |
+500 |
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10. Print refund check |
1510 |
+500 |
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13.
Post final pmts |
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14. Enter receipts |
1010 |
+12000 |
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Get CC final pmt |
2040 |
-1280 |
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Apply CC final pmt |
2040 |
+1280 |
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Get CC ARC pmt |
2040 |
-220 |
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Apply CC ARC pmt |
2040 |
+220 |
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16. Post 8 AR tickets |
2520 |
+1600 |
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17.
Refund sale |
2520 |
+2000 |
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18. Print refund check |
1510 |
+2000 |
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19.
ARC draft (8 tickets) |
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20. Check to provider |
2521 |
+7220 |
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21. Adjust GL |
2520 |
+4400 |
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