DM Web Workflow & Accounting Impact Guide

Creating a client record has no accounting impact. This step is informational only and does not create any financial transactions.

Creating a project has no accounting impact.

Manually added, clipped items and time entry: These items are considered estimates only. No revenue is recognized, no expenses are recognized and no accounting entries occur.

Inventory/Stock Items: Inventory items already carry a financial value because they exist within inventory assets.

However adding the inventory item to a project does not immediately impact accounting. The accounting impact occurs later when the client invoice is posted

at invoicing: Inventory Asset decreases and Cost of Goods Sold (COGS) increases.

The Item Search function allows you to find specific specifications based on selected criteria. Nearly every custom attribute of each component in the system can be searched.

Proposals are considered pro-forma estimates. Creating a proposal has no revenue impact, no expense impact and no balance sheet impact. No accounting entries are created.

Editing a proposal that has not been invoiced has no accounting impact.

Even if deposits have already been collected, the deposit remains attached to the proposal and no accounting values change

Integrated payments automatically record within Design Manager.

When the payment is first processed, Undeposited Funds increases and Client Deposits increases. Undeposited Funds is a temporary asset account used for incoming payments that have not yet reached the bank.

When deposits are transferred into the bank account, Undeposited Funds decreases and Bank Account increases. The client deposit liability remains available for future invoicing.

If the client pays outside of DesignPay, the payment must be entered manually.

When recording a manual deposit:, Bank/Cash account increases and Client Deposits increases. This reflects cash received from the client for future goods or services.

Refunding Money Back to the Client: Client Deposits decreases and Bank/Cash account decreases.

Refunding Funds “On Account” or to Retainer: No cash movement occurs when refunding on account. Cash is moved to the retainer if “To Retainer” is selected. Client Deposits value remains unchanged. On Account creates a client invoice with a negative sell price, lowering A/R.

Purchase orders themselves are operational documents only. Creating a PO has no accounting impact, no expense recognition and no liability recognition.

Related Resource

Order tracking has no accounting impact. It is strictly informational and reporting based.

When recording a vendor deposit, Vendor Deposits increases, Bank Account decreases, or Credit Card Liability increases. The accounting impact depends on the payment method used.

Work In Process (WIP) increases. This represents goods or services purchased but not yet sold to the client.

Cost of Goods Sold (COGS): If Bypass WIP was selected when recording the vendor bill, COGS increases instead of WIP. COGS represents goods that have been purchased and sold to the client. Some firms prefer purchases to post directly to COGS rather than WIP.

Previously recorded deposits reduce the remaining invoice balance.

Depending on the payment method, Bank Account decreases, or Credit Card Liability increases.

Vendor Deposit Refunds: Vendor Deposits decreases and Bank Account increases or Credit Card Liability decreases.

Vendor Invoice Refunds: Work In Process decreases, or COGS decreases (if Bypass WIP was used) and Bank Account increases or Credit Card Liability decreases. These entries reverse the original purchasing activity.

When posting a client invoice, several accounting entries occur simultaneously.

Revenue Recognition: The sell price of goods and services impacts revenue accounts. Revenue/Sales increases and Sales account selection is determined by the Sales Category.

Cost of Goods Sold (COGS): The cost side of the transaction is recognized. Work In Process (WIP) decreases and COGS increases. This converts previously accumulated WIP into recognized Cost of Goods Sold.

Sales Tax Liability: If taxable, Sales Tax Liability increases. The invoice date determines when tax appears on sales tax reporting.

Client Deposits Applied: Deposits previously collected on proposals are applied automatically. Client Deposits decreases. This offsets the amount owed by the client.

Accounts Receivable (A/R): Any remaining unpaid balance becomes receivable. Accounts Receivable increases. This represents money owed to the business.

When recording a payment against a client invoice, Bank/Cash account increases and Accounts Receivable decreases. This reflects the collection of outstanding customer balances.

The following reports should be reviewed:

Sales tax is reported based on the date of the client invoice along with taxable sales.

Remitting collected sales tax to the appropriate tax authority is typically required monthly or quarterly.

Payroll is a recurring task that may occur weekly, bi-weekly, or monthly.

Related Resource: Entering Payroll

Managing inventory is an important quarterly, bi-annual, or annual task.

Related Resource: Managing Inventory Items

Recording payments against credit card accounts helps track liabilities and assists with reconciliation.

Related Resource: Paying Credit Card

It is important to keep checkbook records in agreement with bank records.

Reconciling cash accounts monthly is strongly recommended because errors can occur either at the bank or during transaction entry.

Related Resources