Revenue Reconciliation Best Practices

Revenue Reconciliation Best Practices

This report is available in BANG under Reports > Franchise Reports > Revenue Reconciliation 
Every month: 
  • Make sure you are collecting and receiving payment for the enrollments you have sold
  • The Revenue Reconciliation report should be reconciled against your “Cash Flow In” report (refer back to Module 6 in Best Financial Practices course)
  • Make sure the monies you expected to receive is what you got in both in your bank account and on the Revenue Reconciliation report
  • Investigate and correct BEFORE your royalty payment is due!
TIP: As you are reviewing your Revenue Reconciliation report…
  • Make sure you are allocating the funds to cover expected costs and expenses e.g. tutoring costs, royalties, commissions etc. 
  • Move the allocated funds into a separate bank account

Managing Unused Hours with Revenue Reconciliation

As you grow your business you will be having more and more families come onboard along with bigger programs and packages.  You want to monitor and track the hours your families are using to ensure:
  • Program hours are being used in the time frame expected
  • Unused hours have associated expected tutoring costs identified and kept aside
  • Monitor remaining program hours for opportunities of re-enrollment
The best report to use for this in BANG is the Revenue Reconciliation report and should be monitored monthly at a top level and quarterly for a deeper review.
This information from this report to help you manage unused hours: 
  • The hours purchased to date
  • Value Yet to Deliver (House Value) – this is your obligation to the family which is remaining.  

Monitor and Review on a Monthly Basis:

  • Monitor at a top level and compare to the previous month. You can print off the report or export to excel. Exporting to excel will allow you to keep electronic records and also do the comparison in spreadsheet format.  
  • Ensure your families are using their tutor hours (after all they purchased tutoring to get results, close gaps and achieve the goals which were identified in the consultation!)
  • Make sure you are allocating the funds to cover expected costs e.g. tutoring costs

Monitor and Review on a Quarterly Basis:

  • Your obligation to the family is the number of unused hours, at a gross value it may be needed to:
    • Provide a refund/cancellation 
    • Pay for tutoring liabilities related to the delivery of these unused hours.
  • Ensure you have properly set aside the amount needed to cover the remaining tutoring costs required to deliver the remaining tutoring. 

Monitor and Review on a Quarterly Basis (ideally more frequently):

  • Determine what you should have set aside for the tutoring cost:
    • Take the total of the “Value Yet to Deliver” and multiply this by your average cost of tutoring (Tutor Supplier report)
    • This calculation provides your tutor cost liability is
  • Confirm tutor cost liability is in your bank account and available to pay for upcoming tutor liabilities (payroll)
Example:
Total of  “Value yet to deliver” is $96,500.
Average Percent tutor cost is 39.5% (from Tutor Supplier report in the bottom right corner)
Estimate of tutor cost liability = $96,500 times .395 = $38,117.50 
The $38,117.50 is the amount of tutoring cost you can expect on average that you will need to deliver the undelivered hours and should be available in your separate account to ensure you can pay your tutors.

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