Categories & Billing Rules

Category is a classification of an account transaction for the purposes of grouping transactions together. For example:

• You can have multiple rent billing and payment transactions. If all of these were classified as belonging to the Rent category, it would be easy to see exactly how much was billed and paid for Rent and how much is due or paid in advance for Rent.
• Similarly you can have multiple municipal services billing and payment transactions. If all of these were classified as belonging to the Municipal category, it would be easy to see exactly how much was billed and paid for Municipal and how much is due or paid in advance for Municipal.
• The same applies for all the other available categories such as Admin, Deposit, Body Corporate, Pool, Security, Garden, etc.

What is the role of a Beneficiary?

Beneficiaries in WeconnectU are the Banking Details for recipients of payments made from the Trust Account to pay outstanding balances on Account Categories. 

• If we know that the Outstanding Balance on the Municipal Category is R 800 based on the billing and payment transactions on an account, then the total that needs to be paid to settle the Municipal balance on the account is R 800. 
• If we pay R 400 towards settlement of the Municipal category, we know that R 400 is still due to settle the full Category balance. 
• If we paid R 1200 towards settlement of the Municipal category, we know that R 400 was paid in advance on the Municipal category.
• The only outstanding piece of information to create the payment instruction to the bank is the Beneficiary that needs to be paid. In the example above, we have two options:
  • Pay the City service provider directly. In other words, we must link the City beneficiary to the Municipal category under "Categories" in order for the system to know who to pay when a municipal payment is to be made.
  • Refund the Landlord. This would occur if the landlord has already paid the City and needs to be refunded. We then have to make the Municipal category as "Recover to Landlord" so that the system will know that the Landlord is the beneficiary of this category.

Who gets paid first?

The categories under the "Categories" tab has a sequence number that determines the order in which they are considered for payments. The default sequence can be changed on the category panel. The default considerations are as follows:

• Start by considering the Tenant Account categories with the first Category considered being the Rent category:
  • Consider all landlord expense categories that must be paid on behalf of the Landlord out of the Rent. Note that you can only pay Landlord expenses up to an amount equal to the Rent balance.
  • The remaining balance after all Landlord expense balances have been settled can then be paid to the Landlord beneficiaries.
• Then continue to consider the other Tenant Account categories in the sequence they have been setup on the category panel until all the available funds have been distributed.

What if multiple beneficiaries exist for a Category?

• You can have a fixed billing rule against the Rent category to bill the monthly rent to the Tenant account every month.
• You can have a billing rule against the Commission category to bill a % of the rent to the Landlord expense account every month.
• You can have a variable billing rule against the Municipal category to load and bill the municipal services against the tenant account every month.

Key items to remember:

• Accounts in WeconnectU have transactions and categories.
• Categories are used to group similar transactions. Therefore, each transaction must have a category.
• Category balances show how much is owed for that group of transactions based on all billings and payments for the group.
• Category sequence (which can be customized) is the order in which categories are considered for payment when money is available.
• Payments are made to Beneficiaries linked to categories. Therefore, each Category needs to have at least one Beneficiary linked before a payment can be made for that Category.
• If you want to pay the Landlord from a Tenant Account category, you can mark the category as "Recover to Landlord" and the system will automatically link the Landlord beneficiary.
• Fixed and variable Billing Rules are used to bill recurring amounts every month as part of the monthly billing process. Since a Billing Rule creates transactions on accounts, it will have an associated category in order to link the transaction to the correct category or transaction group.

Examples

• The Monthly Rent is agreed to on the Lease Agreement and needs to be billed to and paid by the Tenant every month.
• The Monthly Commission is agreed to on the Mandate and needs to be billed to and paid by the Landlord every month. The commission is normally paid from the Rent on behalf of the Landlord.

• Billing Rules
  • You will need a fixed Billing Rule against the Rent category on the Tenant Account - this billing rule will be displayed on the Billing Schedule every month and will be executed monthly as part of the bulk billing processes.
  • You will need a % of Rent Billing Rule against the Commission category on the Landlord Expense Account - this billing rule will be displayed on the Billing Schedule every month and will be executed monthly as part of the bulk billing processes.
• Categories & Beneficiaries
  • In order to pay the Commission to the Agency from the Rent on behalf of the Landlord, you will have to link the Agency Business Account beneficiary to the Commission category on the Landlord expense account.
  • In order to pay the remainder of the Rent after deductions to the Landlord, you will have to link the Landlord beneficiary to the Rent category on the Tenant account.

• The Municipal Account is received on a monthly basis from the City
• The Tax component of the Account must be paid from the Rent on behalf of the Landlord.
• The Services component of the Account must be paid by the Tenant directly to the City.

• Billing Rules
  • You will need a variable Billing Rule against the Municipal category on the Tenant Account - this billing rule will be displayed on the Billing Schedule for you to complete the Services amount every month from the municipal account received.
  • You will need a variable Billing Rule against the Municipal category on the Landlord Expense Account - this billing rule will be displayed on the Billing Schedule for you to complete the Tax amount every month from the municipal account received.
• Categories & Beneficiaries
  • In order to pay the Tax to the City from the Rent on behalf of the Landlord, you will have to link the City beneficiary to the Municipal category on the Landlord expense account.
  • In order to pay the Services to the City on behalf of the Tenant, you will have to link the City beneficiary to the Municipal category on the Tenant account.

• The Body Corporate Account is received on a monthly basis from the body corporate
• The Levy and Services components of the Account must be paid from the Rent on behalf of the Landlord.
• The Services component of the Account must be billed to the Tenant and when the Tenant pays for the services, the Landlord needs to be reimbursed for the services. 

• Billing Rules
  • You will need a variable Billing Rule against the Body Corporate category on the Tenant Account - this billing rule will be displayed on the Billing Schedule for you to complete the Services amount every month from the body corporate account received.
  • You will need a variable Billing Rule against the Body Corporate category on the Landlord Expense Account - this billing rule will be displayed on the Billing Schedule for you to complete the full body corporate account balance (Levy and Services) every month from the body corporate account received.
• Categories & Beneficiaries
  • In order to pay the full body corporate account balance to the body corporate from the Rent on behalf of the Landlord, you will have to link the Body Corporate beneficiary to the Body Corporate category on the Landlord expense account.
  • In order to refund the Services to the Landlord on behalf of the Tenant, you will have to link the Landlord beneficiary to the Body Corporate category on the Tenant account. You can do this by just marking the Body Corporate category as "Recover to Landlord". The system will do the rest.

Example 4 - Payment Instructions

• The Billing for Rent, Commission, Municipal Account, Body Corporate Account has been done on the Tenant and Landlord Accounts as described in examples 1 to 3 above.
• The tenant then pays the full outstanding balance on the tenant account and the payment received on the credit bank panel is mapped to the relevant Tenant wallet.

Implementation in WeconnectU

The Suggest Payments feature is used to suggest draft payment instructions as follows:

• The Commission category balance on the Landlord expense account is paid to the Agency Business Account beneficiary.
• The Municipal category balance on the Landlord expense account is paid to the City beneficiary.
• The Body Corporate category balance on the Landlord expense account is paid to the Body Corporate beneficiary.
• The remainder of the Rent category balance after deduction of the Commission, Municipal and Body Corporate balances is paid to the Landlord beneficiary.
• The Municipal category balance on the Tenant account is paid to the City beneficiary.
• The Body Corporate category balance on the Tenant account is paid to the Landlord beneficiary since it is a refund to the Landlord who has paid the services already.