BILLING A NEW CLIENT IN ADVANCE

Transcription

1 BILLING A NEW CLIENT IN ADVANCE When you receive a new client and you bill in advance, you have two options as to when you generate a statement for that client. This document discusses your two options and shows you how to set up your billing correctly. The two billing options you have are: Bill Immediately create a billing statement in the middle of the quarter to bill the new client right away. See the next section below for step-by-step instructions for setting the billing spec and portfolio details. Bill at the end of the quarter and adjust for partial previous period. See the section starting on page 4 for step-by-step instructions for setting the billing spec and portfolio details. Note The examples in this document apply only to billing individual portfolios. When members are added to groups, the effects are different. STEPS TO SETUP BILLING IN ADVANCE IMMEDIATELY In this scenario, you are billing a new client as soon as you receive their account usually in the middle of the quarter or billing period. See Calculation for Prorating New Accounts in Advance for an example explaining the calculation for prorating new accounts when billing in advance. In addition, if you are using tiered rates, the adjustment for new accounts can be different from the adjustment for flows. 1 Click the Portfolios Tab. 2 Select the portfolio you want to bill, and then click Go to Details. 3 Click the Account tab. 4 In the Billing Inception date field, enter the date you want to start billing this client. This date can either be the first day that funds were deposited or any date after you have invested the funds according to your client s investment strategy. DocumentID: SPT Last Updated: October 23, 2014

2 5 Click the Settings tab. 6 In the Billing Spec field, select the appropriate billing spec. In the Billing Form field, select the appropriate billing form. 7 Click the Save button to save the changes. 8 Minimize the portfolio details to come back to it later. 9 Click the Billing Tab. 10 Select the spec you assigned to the new account and then click the Go to Details button. 11 On the General tab, verify that the billing dates are for the entire quarter. For example, if the billing inception date is 7/15/2011, make sure the From date of the billing period is 6/30/2011 and the To date of the billing period is 9/30/ Click the Prorate tab and verify that the Prorate New Accounts box is checked. 13 Click the Save button on the spec and close it. 14 Click the Pricing tab. 15 Scroll through all the price file dates and make sure you have a price date on the billing inception date for the new client. Billing a New Client in Advance Page 2 of 5

3 16 Maximize the portfolio details for the new portfolio and click the Reports button. 17 Select the billing statement and then click Run Report. The resulting statement shows the adjustment for an inception date during the period on the bottom of the statement. In this example, we created a ratio of billable days (the number of days under management divided by the number of days in the billing period) and multiplied it by the calculated fees. We then subtract the adjustment amount from the calculated fee to get the total amount, as shown on the shaded line in the example below. See Calculation for Prorating New Accounts in Advance for an additional example explaining the calculation for prorating new accounts when billing in advance. In addition, if you are using tiered rates, the adjustment for new accounts can be different from the adjustment for flows. Billing a New Client in Advance Page 3 of 5

4 STEPS FOR PRORATING NEW ACCOUNTS AT THE BEGINNING OF THE NEXT QUARTER In this scenario, the funds were deposited into the account on the same date, 7/15/2011, but the first billing occurs on 9/30/2011, the next scheduled billing date. The bill will be prorated to include additional fees for the time the money was managed prior to 6/30/2011. See Calculation for Prorating Flows when Billing in Advance for an example explaining the calculation for prorating flows when billing in advance. In addition, if you are using tiered rates, the adjustment for new accounts can be different from the adjustment for flows. 1 Select the portfolio you want to bill and then click Go to Details. 2 Click the Account tab and make sure the Billing Inception date field is blank. 3 Click the Settings tab. 4 In the Billing Spec field, select the appropriate billing spec. In the Billing Form field, select the appropriate billing form. 5 Click the Save button to save the changes. 6 Minimize the portfolio details to come back to it later. 7 Click the Billing Tab. 8 Select the spec you assigned to the new account and then click the Go to Details button. 9 On the General tab, verify that the billing dates are for the entire quarter. For example, if the billing inception date is 7/15/2011, make sure the From date of the billing period is 9/30/2011 and the To date of the billing period is 12/31/ Click the Prorate tab and verify that the Prorate New Accounts box is unchecked. Also, make sure the Prorate Capital Flows box is checked and the prorate flows from fields have the appropriate dates in them. 11 If you made any changes, click the Save button on the spec and close it. Billing a New Client in Advance Page 4 of 5

5 12 Maximize the portfolio details for the new portfolio and click the Reports button. 13 Select the billing statement and then click Run Report. The resulting statement shows the calculated fee for the period as well as an adjustments to add the fee from the flows into the account on 7/15/2011. The calculation is similar to the calculation to prorate accounts in that we first calculate a ratio of billable days (days under management divided by days in billing period). This ratio is then multiplied by the rate and then the flow amount, as shown below. For institutional audiences only Schwab Performance Technologies ( SPT ). All rights reserved PortfolioCenter, PortfolioCenter Hosted, Schwab OpenView Integrated Office, and Schwab OpenView Mobile are products of Schwab Performance Technologies ( SPT ). SPT is a subsidiary of The Charles Schwab Corporation separate from its affiliate Charles Schwab & Co., Inc. ( CS&Co ). CS&Co is a registered broker-dealer and member SIPC that provides brokerage services, while SPT licenses software and provides related technology products and services. SPT and CS&Co are separate companies affiliated as subsidiaries of The Charles Schwab Corporation, but their products and services are independent from each other. SPT's intelligent integration solutions integrate data about accounts custodied at CS&Co. Schwab OpenView Mobile displays data about accounts custodied at CS&Co. Independent investment advisors are not owned by, affiliated with, or supervised by CS&Co. Individual names, account numbers and contact information listed in this document are fictional and not intended to reflect any existing individuals. Both real and fictional securities are listed in the document. Securities and strategies reflected in the document are for educational purposes only and are not, nor should they be construed as, recommendations to buy, sell, or continue to hold any investment nor do the accounts listed reflect individual securities accounts or holdings. Any similarity to an existing individual or account is purely coincidental. Screen shots are provided for illustrative purposes only and have been abridged. Billing a New Client in Advance Page 5 of 5