Office Virtual Training: Quarter-End Billing

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1 Morningstar SM Office Virtual Training: Quarter-End Billing Overview Reviewing the Billing Process Overview What is the billing process in Morningstar Office? What are some other Billing activities I should be aware of? Using the Billing Information and Fee Calculation Report Overview What is the Billing Information and Fee Calculation report? How do I run the Billing Information and Fee Calculation report? How should I examine the Billing Information and Fee Calculation report? Diagnosing Billing Problems Overview What is the process for diagnosing billing problems in Morningstar Office? How can I diagnose billing issues in Morningstar Office? How do I generate the Billing Setting Diagnosis report? How can I tell if an account has been included in billing? Fixing Common Billing Issues Overview How do I include an account in the client aggregate? How do I include an account in Management Fees? What do I do if an account s value does not match its billable balance? How can I determine if the Fee Allocation for a client s accounts is correct? How do I exclude or include Cash at the global level? Re-running the Billing Diagnostic Report How does the Billing Summary report help identify that issues have been resolved? - 16 How do I fix the Billing Date on the Billing Summary report? Generating the final Billing Summary report Troubleshooting billing checklist Version 2.0 i

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3 Morningstar SM Office Virtual Training: Quarter-End Billing This session s main objective is to learn how to troubleshoot common billing errors in Morningstar Office. A number of tools are available within Morningstar Office to help you diagnose and resolve common billing issues. Overview The following topics are covered in this manual: a review of the overall billing process in Morningstar Office how to generate and interpret the Billing Information and Fee Calculation Report, to identify clients with billing-related errors how to generate the Billing Setting Diagnosis report, to identify errors within a client record, and how to diagnose and fix various billing-related errors in Morningstar Office. Note: If you have not already attended the Billing class presented as part of Morningstar Office Academy, you can view a recording of it here. Also, the Billing manual is available from the Support + Training page, and you can find the same content in the online Help section. Version 2.0 1

4 Reviewing the Billing Process Overview Reviewing the Billing Process In this section, we will review the process for creating and applying billing settings for your practice, as well as generating the Billing Summary report and a custodian fee file. We will also briefly discuss some other billing-related activities you should be aware of when preparing to bill clients. Overview When creating the billing settings for your practice, use the process described in the following table: This step Allows you to What is the billing process in Morningstar Office? Create Management Fees Apply Fee Methodologies Assign Management Fees Create Management Fee Allocations Generate Fee Data Create Billing Summaries Generate Custodian Fee Files Determine how to bill clients (flat fee, tiered fees, etc.) Tell the system how to run calculations (bill at the client level, bill at the account level, etc.) Assign Fees based upon Fee Methodology (which client or account is billed using which fee?) Determine which client account to draw fees from Run the billing calculations, to ensure it is correct before reports are generated Create the client s bill; this is easiest done via a batch Create a list of client fees to upload to your custodian s web site; the transactions related to these withdrawals can later be imported back into Morningstar Office In some cases, you made need to perform additional steps; including the following: create additional charges or discounts for a client or account exclude certain accounts from being billed exclude certain securities (e.g., Cash) from being billed, either for particular accounts, or at the practice level, and create a Billing Disclosure, to appear on every Billing Summary report. What are some other Billing activities I should be aware of? Version 2.0 2

Using the Billing Information and Fee Calculation Report Overview Using the Billing Information and Fee Calculation Report The first step in conducting billing for a particular period is to allow the

5 Using the Billing Information and Fee Calculation Report Overview Using the Billing Information and Fee Calculation Report The first step in conducting billing for a particular period is to allow the batch report containing the Billing Summary report to run. Then, you can review the billing information contained in Morningstar Office for your practice. This section explains the following concepts: what the Billing Information and Fee Calculation report is how to generate the Billing Information and Fee Calculation report, and how to interpret and read the Billing Information and Fee Calculation report. Overview Once your batch report containing the Billing Summary report completes for a billing period (e.g., month, quarter), you can run the Billing Information and Fee Calculation report. The report can help you determine if all of your fees generated correctly, and whether anything is amiss with your Billing Summary reports. What is the Billing Information and Fee Calculation report? Note: The Billing Information and Fee Calculation report provides billing details only for the most recent billing cycle. To generate this report, do the following: 1. From the menu bar at the top of the Morningstar Office window, select Reports Billing Management Billing Information and Fee Calculation Report Practice. The Report Options dialog box opens. How do I run the Billing Information and Fee Calculation report? Follow this path to generate the Billing Information & Fee Calculation report Version 2.0 3

6 Using the Billing Information and Fee Calculation Report How do I run the Billing Information and Fee Calculation report? 2. Use the dialog box to configure the report for the most recent billing period, then click OK. The report opens in Excel. Version 2.0 4

Using the Billing Information and Fee Calculation Report How should I examine the Billing Information and Fee Calculation report? Review the report to identify any issues that exist with billing.

7 Using the Billing Information and Fee Calculation Report How should I examine the Billing Information and Fee Calculation report? Review the report to identify any issues that exist with billing. In this case, take note of the following issues: Only one of three accounts owned by the Miles family are represented on the report The account on the report does not reflect what the correct fee allocation should be for the client s accounts, and The account on the report has a lower billable balance than expected. How should I examine the Billing Information and Fee Calculation report? Here you can see just one account for the Miles Family client; three accounts should be present on the report Version 2.0 5

8 Diagnosing Billing Problems Overview Diagnosing Billing Problems If you identify problems on the Billing Information and Fee Calculation report, you can use the Billing Setting Diagnosis report to help identify various problems with your billing settings. In this section, the following issues are reviewed: what the process is for diagnosing and resolving billing issues in Morningstar Office what tool is available to aid in diagnosing billing issues how to generate the Billing Setting Diagnosis report, and how to tell if an account has been excluded from billing. Overview When diagnosing billing problems, complete the following steps: 1. For the client identified in the Billing Information and Fee Calculation report as having a problem, run the Billing Setting Diagnosis report; the report is automatically saved to your computer. 2. Open the Billing Settings Diagnosis report from your computer. 3. Review the Billing Summary report for the client, to confirm the problems noted in the Billing Information and Fee Calculation Report. What is the process for diagnosing billing problems in Morningstar Office? In running the Billing Information and Fee Calculation report, we were able to realize that the fee data for the Miles family was both missing and incorrect. What we did not know, though, is exactly what was wrong with the client or account settings to have caused these problems. To investigate what system settings are causing issues with the creation of billing data, we can use the Billing Setting Diagnosis report. The Billing Setting Diagnosis report is a Notepad file that summarizes the following information for each account belonging to a client or group: Fee Allocation % Fee Setting Fee Methodology, and Securities excluded from billing (at the account and global level). How can I diagnose billing issues in Morningstar Office? Version 2.0 6

Diagnosing Billing Problems How do I generate the Billing Setting Diagnosis report? To generate the Billing Setting Diagnosis report, do the following: 1.

The Select a Writable Client/Group dialog box opens. How do I generate the Billing Setting Diagnosis report? Click once on this icon 3.

9 Diagnosing Billing Problems How do I generate the Billing Setting Diagnosis report? To generate the Billing Setting Diagnosis report, do the following: 1. From either the Client Management or Portfolio Management tabs, go to the Billing page. 2. From the toolbar above the spreadsheet area, click the Billing Setting Diagnosis icon. The Select a Writable Client/Group dialog box opens. How do I generate the Billing Setting Diagnosis report? Click once on this icon 3. Search for the name of a client or group for whom you want to run the report, then click Go. 4. Select the name of the client or group, then click OK. The Browse for Folder dialog box opens. 5. Select a location to save the report, then click OK. 6. Use Windows Explorer to open the report. It will appear in Notepad. Note: The report is saved as yyyy-mm-dd_hh-mm-ss.txt You should immediately rename this file to something more meaningful, such as the name of the client or group for whom the report was generated. The Miles Fee Allocation is 100% for the IRA account The Individual Amy Miles account has been excluded from billing This holding has been excluded from management fees Cash has been excluded from management fees at the global level Version 2.0 7

10 Diagnosing Billing Problems How can I tell if an account has been included in billing? To diagnose the issue of the two accounts not appearing on the Billing Information and Fee Calculation report, check to see whether each account for a client has been included in billing. To determine this, do the following: 1. Go to the Client Management tab, and select the Clients page. 2. Open a client record by double-clicking its name. The Client window opens. 3. Go to the Accounts page in the Client window; be sure you are in the Overview view. In the screenshot below, note that the Miles Joint account is grayed out, meaning it is not included in the client aggregate. How can I tell if an account has been included in billing? Accounts that are grayed out are not included in the client aggregate Version 2.0 8

Overview Fixing Common Billing Issues Now that you have diagnosed issues with the billing data for a billing period, the next step is to correct any problems you ve discovered.

11 Overview Fixing Common Billing Issues Now that you have diagnosed issues with the billing data for a billing period, the next step is to correct any problems you ve discovered. This section covers the following common issues users encounter during billing: how to include an account in the client aggregate how to include an account in Management Fees what to do if an account s value does not match its billable balance how to determine if the Fee Allocation is incorrect how to exclude or include Cash at the global level re-running the Billing Diagnostic Report generating the Billing Summary report how to fix the Billing Date on the Billing Summary report, and generating the final Billing Summary report. At the end of this section, you ll find a Troubleshooting Billing Checklist, which can help you resolve the most common billing issues users encounter. Overview To address the problem of an account being excluded from the client aggregate, do the following: 1. Be sure the client record is open and that you are on the Accounts page; if not, double-click a client s name to open it, then go to the Accounts page. 2. From the Client window, check the box to the left of the grayed-out account to select it. 3. From the menu bar above the spreadsheet area, select Action Exclude Account From Client Aggregate No. The account and client record update automatically. How do I include an account in the client aggregate? Version 2.0 9

How do I include an account in Management Fees? To ensure an account is included in the calculation of management fees, do the following: 1. On the Portfolio Management tab, go to the Accounts page.

12 How do I include an account in Management Fees? To ensure an account is included in the calculation of management fees, do the following: 1. On the Portfolio Management tab, go to the Accounts page. 2. Right-click on the account. 3. From the right-click menu, select Edit Account Settings. The Account window opens. 4. Be sure the Include in Management Fees Calculation box is checked. How do I include an account in Management Fees? Be sure this box is checked 5. Click Save. Version

Do the following: 1. From the Portfolio Management tab, select the Accounts page. 2. Double-click an account to open it. The Account window opens. 3.

13 What do I do if an account s value does not match its billable balance? If the value of an account in the Billing Information and Fee Calculation report does not match its billable balance, check to see whether a security in the account has been excluded from billing. Do the following: 1. From the Portfolio Management tab, select the Accounts page. 2. Double-click an account to open it. The Account window opens. 3. Make sure you are on the Holdings Summary page in the Account window. 4. Select the security whose value matches the discrepancy between the account value and the billable balance. What do I do if an account s value does not match its billable balance? Note: In this example, it would be Nighthawk Radiology Holdings, Inc. 5. From the Action menu above the spreadsheet area, select Holding Settings. The Select holding settings dialog box opens. Select this option from the Action men 6. On the dialog box, deselect the Exclude from Management Fee Calculations box. Be sure this box is not checked 7. Click OK. Version

How can I determine if the Fee Allocation for a client s accounts is cor- One of the items the Billing Diagnosis report showed us was that the fees for the Miles Family client were allocated 100% to

14 How can I determine if the Fee Allocation for a client s accounts is cor- One of the items the Billing Diagnosis report showed us was that the fees for the Miles Family client were allocated 100% to one account. To address this incorrect Fee Allocation setting, do the following: 1. From the menu bar at the top of the Morningstar Office window, select Tools Settings Settinga Assignments. The Client Settings Assignments window opens. 2. On the Client Settings Assignments page, scroll to the right until you see the Fee Allocation Account(s) column. 3. For the row of the client you are investigating, in the Fee Allocation Account(s) column, click the magnifying glass icon. The Billing Accounts dialog box opens. 4. On the Billing Accounts dialog box, click Add. The Find Account(s) dialog box opens. 5. Search for and select the accounts to which you would like to allocate fees for the client. 6. Click OK to close the Find Account(s) dialog box. 7. On the Billing Accounts dialog box, in the % Fee Allocation column for each account, type the fee allocation percentage for each account. 8. Click Save + Close. How can I determine if the Fee Allocation for a client s accounts is correct? Version

How do I exclude or include Cash at the global level? On the Billing Information and Fee Calculation report, it was noted that the billable balance for the Miles account that did appear was too low.

15 How do I exclude or include Cash at the global level? On the Billing Information and Fee Calculation report, it was noted that the billable balance for the Miles account that did appear was too low. We ve already considered whether this could be due to an account not being included in a client s aggregate, or if a holding had explicitly been excluded from management fees for an account. Another factor that could lead to this issue is a security being excluded at the global level. For instance, some advisors might exclude Cash from being billed for all clients. To check whether a security is excluded from management fees at the global level, do the following: 1. From any Account window, click File Preferences. The Account Setting dialog box opens. How do I exclude or include Cash at the global level? Note: You can also access the same dialog box from the Home tab by going to the Settings page and clicking once on Preferences. Click once on this option from the File menu 2. Click Exclude Securities. The Exclude Security from Management Fee and Performance Calculation dialog box opens. Click once on this button Version

16 How do I exclude or include Cash at the global level? 3. If you see a security that should be included in management fees for all accounts, be sure the box under the Exclude from Management Fee column is not selected. 4. Click Save + Close to close the Exclude Security from Management Fee and Performance Calculation dialog box. Uncheck this box if you want a security to be included in management fees 5. Click Save + Close to close the Account Setting dialog box. Version

17 Re-running the Billing Diagnostic Report Now that the issues have been fixed, you should review the Billing Diagnostic report again. Note that the following issues have been corrected: All three accounts owned by the Miles family are represented in the report. Both Taxable accounts are included in the fee allocation (while the non-taxable account is still not included). Holdings are not excluded at the Account or Global level. Re-running the Billing Diagnostic Report The management fees are now properly allocated between these two accounts All three accounts owned by the Miles Family client are now included in the management fees No accounts have been excluded from management fees No securities have been excluded from management fees Version

18 How does the Billing Summary report help identify that issues have been Now that the Billing Diagnosis report is clean, you can generate the Billing Summary report, for one last review. The following issues have been corrected: All three accounts owned by the Miles family are represented on the report. Both of the taxable accounts are included in the fee allocation (while the non-taxable account is not included here). Both the Market Value and Billable Balance are the same. However, one issue does remain to be resolved. Namely, the Billing Date on the report is incorrect, as it is set to bill in advance, rather than in arrears. How does the Billing Summary report help identify that issues have been resolved? This billing date indicates the client is being billed in advance, rather than in arrears The Market Value amounts are equal to the Billable Balance mounts All of the accounts are now included, and the fee allocation is also correct Version

19 How do I fix the Billing Date on the Billing Summary report? To change a client from being billed in advance to being billed in arrears, you need to modify the Management Fee Setting applied to the client. Keep in mind, though, that changing this setting will affect all other clients to whom this setting is also assigned. Do the following: 1. From the Home tab, select the Settings page. 2. On the Settings page, click once on Reports, Tax Lots, Transactions and Management Fees. The Settings window opens. 3. Double-click the Management Fee assigned to the client to open it. The Management fee setting dialog box opens. How do I fix the Billing Date on the Billing Summary report? Note: The name of the Management Fee assigned to the client can be seen on the Billing Summary report. 4. From the Bill in drop-down field, select Arrears. Select this option from the Bill in drop-down field 5. Click Save + Close. Note: If you do not want to change this setting for all clients, you can click Save As and save it with a new name. If you do save it with a new name, you will also need to assign this newly named Management Fee Setting to the client. Version

20 Generating the final Billing Summary report The last step is to run the final Billing Summary, to ensure the Billing Date is correct. Generating the final Billing Summary report The Billing Date on the report now indicates that the client is being billed in arrears, rather than in advance Version

21 Troubleshooting billing checklist Use the steps in the following table to help you troubleshoot the most common billing issues in the future. Troubleshooting billing checklist Problem Diagnosis Resolution Are my fee settings correct? Are my Billing Summary reports accurate? How can I see the data for my Billing Summary reports? Information is missing from the Billing Information & Fee Calculation report How do I know the changes I made took affect? Before generating your billing fee data, review the Billing Setting Validation Report to see if any accounts have not been included in your management fees, whether an account contains any positions excluded from billing, and whether the correct Fee Setting and Fee Methodology have been applied. To see if the data on your Billing Summary reports is accurate, run your batch billing for the quarter. If the information on your BIlling Summary reports seems to be wrong, you can see the data for the reports by running the Billing Information and Fee Calculation report. If you notice that information is incorrect or missing from the Billing Information & Fee Calculation report, run the Billing Settings Diagnostic report for the affected client(s). After you diagnose and resolve all of the billing issues you discovered via the different reports, rerun the Billing Summary report for the affected client(s). From the Reports menu, select Billing Management Billing Setting Validation Report Practice. (It will open in Excel.) Be sure to check the following columns for accuracy: Included Management Fee Excluded position Fee Setting, and Fee Method. Go to the Reports tab, and spot check a random sample of the Billing Summary reports for the quarter. The the Reports menu, select Billing Management Billing Information & Fee Calculation Report Practice. Check the report for discrepancies from what you expected to see. From the Portfolio Management or Client Management tab, go to the Billing page. From the toolbar above the spreadsheet area, click the Billing Setting Diagnostic icon. Select the client or group you want to investigate, save the file, then open it and review it for errors. Correct the errors, then re-run Billing Settings Diagnostic report to ensure they no longer appear. From the Portfolio Management or Client Management tab, go to the Billing page. Click the Billing Summary icon, then generate the report for the affected client. Version