1. Accounting Made Simple(r)
Theatre Manager
Accounting Made Simple(r)
May, 2018
Introduce self
How many do accounting?
How many like accounting?
How many would like to get rid of the work and give it so somebody else?
How many people are audited?
How many of you like being audited?
How many would like to have perfect audits?
The accounting process in Theatre Manager is meant to be simple – but we get many questions on it every day – people try to make it harder on themselves than it really is.

2. 1 Golden Rule 2 Key Concepts 11 Key Principles and some tips..
Introduce self
How many do accounting?
How many like accounting?
How many would like to get rid of the work and give it so somebody else?
How many people are audited?
How many of you like being audited?
How many would like to have perfect audits?
The accounting process in Theatre Manager is meant to be simple – but we get many questions on it every day – people try to make it harder on themselves than it really is.

3. Real Time Theatre Manager Patrons A/R and all Sub-Ledgers General
Post Sales and Deposits
Theatre Manager – real time
box office during the day
- web 24 hours a day
What is ratio of web to box office sales?
-- we are hearing a number of paces running about 50/50
How many 40/60, 30/70 web to box office?
Real Time

4. Accounting Time Accounting Program A/P Payroll General Ledger
Job Costing
Accounting program – Accounting time
Generally follows bank time
Generally when the accounting person works.
-- Large organizations – daily
-- Small organizations -- might be weekly.
Accounting Time

5. Only way to resolve real time and physical time – take a snapshot
do the End of Day
-- deposits and sales entries, at a minimum
-- look for a difference of zero
Explain the equation upper right

6. (based on source document accounting principle)
Golden Rule
Post to the G/L
- make entries to your accounting program
How many people do this?
How many people also:
--- adjust the entries or
--- put them into a spreadsheet or
--- on a separate report before sending to the accounting department
If you are doing that, you are wasting your time – and thats better served with customers
(based on source document accounting principle)
Transfer GL entries from Theatre Manager to your accounting program

7. No exceptions Golden Rule
Theatre Manager
Accounting Program
Patrons
A/P
Payroll
A/R and all
Sub-Ledgers
General
Ledger
General
Ledger
Job Costing
Balance
Daily
Real Time
Post Sales and Deposits
Golden Rule
Plus it leads to errors .. So, lets revise the golden rule
This bother anybody?
(based on source document accounting principle)
Transfer GL entries from Theatre Manager to your accounting program as-is, unchanged, even if you suspect values are wrong.
No exceptions

8. Cash Accounting
Cash accounting is an accounting method where receipts are recorded when they are received, and expenses are recorded in the period in which they are actually paid.
There are two forms of accounting. Cash Basis and Accrual.
Cash basis means you put things into your books when cash changes hands for both income and expenses

9. IRS Tax Rule
If your business stocks an inventory of items that you will sell to the public, the IRS requires you to use the accrual accounting method. Inventory includes any merchandise you sell as well as supplies that will physically become part of an item intended for sale.
Tickets = Inventory

10. Tends to cause wildly fluctuating ‘Profit’ picture Also :
Cash Accounting
Cash accounting is an accounting method where receipts are recorded when they are received, and expenses are recorded in the period in which they are actually paid.
Tends to cause wildly fluctuating ‘Profit’ picture
Also :
Ticket are inventory (IRS)
Donations are at time of gift not at time of payment (IRS)
any C-Corp over 5 million - period
Because of the IRS tax rule It tends to show your profit as wildly swinging because people may pay you a little in advance and some later on despite when your suppliers are paid for providing the items you use to make profit.

11. Accrual Accounting – Theatre Manager
Purpose
Account
Debit
Credit
Sale
Income
$10
A/R
Payment
Cash (Asset)
Accrual Accounting – Theatre Manager
Accrual accounting allows recording income/expenses when they occur – and anything not paid yet is held in an account called Accounts Receivable.
Not for profits, with paid staff, donations, who want audits under GAAP, who have inventory – accrual accounting !!!
Accounting method that records revenues and expenses when they are incurred, regardless of when cash is exchanged. The term "accrual" refers to any individual entry recording revenue or expense in the absence of a cash transaction

12. Theatre Manager designed using
The golden rule (principle of source document)
Accrual accounting
Designed for the IRS, GAAP, FASB – and even revenue canada

13. Principle #1 - DAILY Any mistakes, fix in TM Theatre Manager
Accounting Program
Patrons
A/P
Payroll
A/R and all
Sub-Ledgers
General
Ledger
General
Ledger
Job Costing
Balance
Daily
Real Time
Post Sales and Deposits
Principle #1 - DAILY
Any errors, fix in TM
Those delta’s are passed through to end of day – and are sent to accounting
Eg +$10M donation – obviously wrong
Fix in TM, sends -$10M next day
Any mistakes, fix in TM

14. Make sure End of Day is Zero every day
Principle #2 - DAILY
Ensure end of day difference goes to zero every day
If not, try figure it out using the tools on the web.
If still out of whack, contact
Make sure End of Day is Zero every day

15. Date is different than Date Posted
Principle #3
Post to the GL.
This brings up another very important thing to know.
Date and date posted are not the same.
Define
Use DATE POSTED in the vast majority of any report queries in TM
Use DATE POSTED as the date you enter things into the accoutning system
THIS IS ONLY WAY TO compare to reports in accounting with TM
Date is different than Date Posted

16. Account numbers and names – make TM same as the accounting setup
Principle #4
Make accounting in TM follow your financial system
Account numbers and names – make TM same as the accounting setup

17. There are receivables every day
Principle #5
Make sure you have two special accounts in TM for this purpose – they are set up in code tables
There are receivables every day
make these two accounts in your accounting system and only use as Control Accounts for Theatre Manager

18. Reconcile cash/check/credit card accounts in accounting to bank
Principle #6 - MONTHLY
Reconcile your bank statement at least monthly, if not more often.
Don’t worry about reconciling these in TM.
If they don’t match, then come back to TM.
Reconcile cash/check/credit card accounts in accounting to bank
(DO NOT WORRY ABOUT TM)

19. Spot check A/R total in accounting to TM receivables
Principle #7 - MONTHLY
And if you’ve made a mistake, looking at
a/R tm, to compare to the G/L account – they should match at
- the beginning of the day BEFORE things are posted
- the end of the day after things are posted
Spot check A/R total in accounting to TM receivables

20. Spot check A/R post dated payment to payment report
Principle #8 - MONTHLY
Check your post dated payments.
Spot check A/R post dated payment to payment report

21. • Backup the database to a safe place
At last day of fiscal year or first day of next year, or first time in the office after year end
Principle #9 – ANNUALLY
• Backup the database to a safe place
• Print the Receivables Report and save for auditor
• Run Year end Rollover

22. Principle #10 – End of Show • Backup the database to a safe place
At last day of fiscal year or first day of next year, or first time in the office after year end
Principle #10 – End of Show
• Backup the database to a safe place
• Print the Receivables Report and save for auditor
• Run Year end Rollover

23. Recap for the perfect audit same accounts in TM
put data into accounting unchanged
reconcile monthly
year end backup & A/R reports
end of show - testing
recap

24. What else can I do to verify the accounting data?
And can I save some effort along the way?
Is that all we have to do? More or less.
Can I do things to save time?

25. Golden Rule (based on source document principle)
Theatre Manager
Accounting Program
Golden Rule (based on source document principle)
Transfer GL entries from Theatre Manager to your accounting program as-is, unchanged, even if you suspect values are wrong. No exceptions
Patrons
A/P
Payroll
A/R and all
Sub-Ledgers
General
Ledger
General
Ledger
Job Costing
Balance
Daily
Real Time
Post Sales and Deposits
Tickets
Purpose
Account
Debit
Credit
Earned Sale
Income
$10
A/R
Refund
Exchange
Income To
Income Fr $8
A/R Diff $2
Deferred Sale
Liability
Event Rollover
Donations
Purpose
Account
Debit
Credit
Donation
Income
$10
A/R
Benefit
Liability $2
Expense
Y/E Rollover
Explain the financial transactions
Payments
Purpose
Account
Debit
Credit
Payment
A/R
$10
Asset
Post Dated
A/R Post
Deposit
Restricted
Xfer From
Donations
Xfer to
Gift Cert
Or Pass
Purpose
Account
Debit
Credit
Sale
Liability
$10
A/R
Redemption
Income

26. Tickets explain window & transactions
Highly recommend using deferred accounting – but not everybody likes it.
Tickets
Purpose
Account
Debit
Credit
Earned Sale
Income
$10
A/R
Refund
Exchange
Income To
Income Fr $8
A/R Diff $2
Deferred Sale
Liability
Event Rollover

27. Liability account… plus set to 9999999 acct if not allowed
Gift Cert
Or Pass
Purpose
Account
Debit
Credit
Sale
Liability
$10
A/R
Redemption
Income

28. Donations Explain various accounts Explain benefit accounts. Purpose
Debit
Credit
Donation
Income
$10
A/R
Benefit
Liability $2
Expense
Y/E Rollover

29. What about items that are tickets to an event plus a donation.
Sell as an event ticket first. Then when you’ve decided the donation component, set up pricing and then exichange to lower price and add a donation to balance it out
Money will move to the right place.

30. • Payments pay for balance, never items on an order
Purpose
Account
Debit
Credit
Payment
A/R
$10
Asset
Post Dated
A/R Post
Deposit
Restricted
Xfer From
Donations
Xfer to
Finally. What happens when things are paid, no matter what is bought – per accrual accounting
Principle #11
• Payments pay for balance, never items on an order

31. Impact of using A/R – Royalty Payments
You can never tell what payment method was used to pay for specific items – you can only infer it.
Most contracts you enter into allow deductions against royalties from credit card fees and/or sales source like subscriptions.
Since this can only be inferred from the current state of what you have received, you have to get a very decent approximation when you are paying royalties using reports. It is not something you ever enter into your accounting program