Gift Certificates
I've started selling gift certificates at our clinic. I'm wondering how others are managing the accounting of this. Technically, this creates a liability in accounting terms -- something that OVPMS doesn't deal with. My staff had the inclination to treat it as cash -- which somewhat makes sense -- but it results in double counting the revenue for the value of the certificate. We had thought perhaps to create a negative price product to deal with this, or creating a new tender and filtering it out in all the reports that are related to revenue. What is everyone else doing?
Cheers, Paul
Re: Gift Certificates
Paul - I think that the way to handle it is first create a Custom Payment Type of "Gift Certificate". Then when the item(s) are paid for you first enter the gift certificate(s) as a payment type Other/Gift Certificate, and then use another payment type to pay for the balance of the invoice. If you wanted yout could create multiple gift certificate entries, one for each type - ie Gift Certificate $50, Gift Certificate $100. etc
If you do the Till Balance properly (and 1.7 will ship with an improved Till Balance report), then it shows as below. The summary page gives the total of the 'Other' type payments - but it would be possible to split out the Gift Certiicates if you needed to.
I think that the new Till Balance will work happily with 1.6
Regards, Tim G
Re: Gift Certificates
It makes sense to me to use a new payment type. I would just need to modify all other reports to ignore this one since it's really a reduction in liability as opposed to income. I have a lot of reports that track how well the clinic is doing based on payments and this would skew those other numbers if not accounted for. That said, maybe that's just the pain I need to go through. :)
Cheers, Paul
Re: Gift Certificates
The other way is of course to use a negative price line item. The Hong Kong practice uses negative priced items to provide discounts (and these are in a separate 'Discounts' Product Type). Hence the Income report [which orders stuff by product type] shows the discounts being given. Also, I can force the discount line items to the bottom of the invoice.
The problem of this approach is that you have to adjust the invoice when the customer proffers the gift cerificate as payment.
If you know that your gift certificates are going to be used, then you could set them up a positive priced items and at the time of issue, generate a credit note for the customer. The customer's balance is now reduced by the value of the certificate, and your reporting now includes all your gift-certificate related liabilities. However, if like frequent flyer points, there is a huge 'never used' component, then this is not a sensible way to proceed.
Regards, Tim G