Support
Understanding the End of Day Summary Values
The End of Day summary reports daily, month to date, and year
to date figures that should aid the owner and manager in understanding
how his business is performing. Considerable control over the
business can be attained by understanding these figures and monitoring
them frequently. These figures also may be used to establish
commission and bonus schemes for employees.
When calculated values are obtained, it is helpful to know how
many agreements or units make up that particular value. Standard
statistical methods usually report the number of observations
used to calculate a statistic as N, and this notation often has
been followed in the End of Day Summary report. Occasionally,
the number of units as well as the number of agreements is important
information. In such cases, the number of agreements is represented
by N and the number of units is reported as Units.
In many calculations, the number of days in a month or the number of weeks
in a month is used. The number of days per month is determined to be 365.25
days per year divided by 12 months per year = 30.4375 days per month. The number
of weeks per month is determined to be 30.4375 days per month divided by 7
days per week = 4.3482142 weeks per month.
Agreement
Production
The agreement production, recorded for both the number
of new agreements and the number of new units, is calculated
by tallying transactions in the transaction register at the end
of each business day. Terminations include any transaction that
may terminate an agreement, namely: a return or repossession
of all units assigned to an agreement, a charge-off of an active
or skip agreement, or a cash option of an active agreement. The
terminations are subtracted from the gross production to yield
the net production. Cancellations, the number of agreements terminated
for which no money was collected, also is tracked. Subtracting
this number from gross production yields the value reported as
true production.
Delinquency Summary
Delinquent agreements and units are separated into active,
ceased lease, skip, and other agreements. Active agreements are
any agreements with an A status that are more than one day past
the adjusted payment next due date (for an explanation of the
adjusted next due date, see page 81). Agreements falling into
the delinquent ceased lease category are those agreements that
were terminated through return or repossession (status R or X)
but that continue to owe a balance. These ceased lease agreements
should either be worked for collections, non-cash adjusted so
that the balance becomes zero (causing the payment next due date
to be set to zero), or charged-off to bad debt (charge-offs were
explained on page 36). Delinquent agreements that have any other
status fall into the other category (e.g., statuses such as Hold
and Invoice).
The denominator used to calculate the percentages for active and ceased lease
delinquent agreements is the number of all active agreements, all on service
agreements, and the number of agreements that fall into the categories delinquent
ceased leases, delinquent skips, and other delinquents. Therefore, the percentages
calculated here may not match the percentages calculated at the delinquency
summary at the end of a Debt report.
The denominator used to calculate the percentages of active delinquent units
is the total number of units on rent and on loan. The denominator for the delinquent
amounts is the total monthly billing for rent-to-own, rent-to-rent, and layaway
agreements.
Agreement Status
At the end of each day, the agreement file is processed and the status of each
agreement record is tallied. The result is broken down by agreement type.
Billing
The amount of rent and insurance being billed for each pay period is summed.
The number of units represented by this billing also is summed. Then, in
order to give a meaningful sum, each amount being billed is converted to
a monthly equivalent, and a total monthly billing reported. For example,
the amount being billed weekly is multiplied by the number of weeks in a
month, and the amount being billed semi-monthly is multiplied by two.
Value of Agreements
The future amount of rent and insurance expected to be collected from agreements
is calculated by taking the amount being billed for each agreement and multiplying
it by the term remaining on the agreement. The figures thus computed are
summed for all agreements with an A (Active) status. The average agreement
value is calculated by dividing the total rent receivable by the number of
agreements represented by it. The average unit value is calculated by dividing
the rent receivable by the number of units represented by it (see page 5
of the End of Day Summary for these averages).
Agreement Transaction Summary
The transaction register is summarized here. Cash Options, Charge-offs, and
Returns and Repossessions that terminate agreements are tallied in the first
block. The average agreement length in months of agreements terminated by
these methods is recalculated every time end of day is run, by summing the
length in days each agreement continued (the number of days between the delivery
date and the closed date) for each record with the appropriate status. Note
that even though an agreement may have a status of C (charge-off), Rentpro
maintains the previous status of the record internally so that the record
will contribute to the average length of terminations by return. These sums
are then divided by appropriate denominators, e.g., the total number cash
optioned, the total number returned, the total number repossessed, and the
total number of active agreements charged-off. This last quotient is divided
by the number of days per month to yield an average agreement length in months.
The other transaction block summarizes agreement transactions that do not terminate
an agreement. For example, if an agreement has 2 units but only returns one
unit, the numbers across from Returns in Other Transactions should all increase
by one whereas the numbers across from Returns at the Agreement Termination
block would remain unaffected.
Inventory Transaction Summary
The transactions dealing with inventory are summarized here. Inventory are
grouped by whether the transaction causes them to come into the store or
go out of the store. For example, adding inventory into the system, transferring
inventory in, returning inventory from an agreement, or exchanging inventory
may all bring inventory into the store. In contrast, putting inventory on
rent, transferring inventory out of the store, selling, or exchanging inventory
can each cause inventory to leave the store.
Internal Control
The transactions dealing with service cost collected and petty cash disbursement
are tallied here. In addition, over and short amounts from the cash drawer
reconciliation are reported here.
Income Summary
The transactions dealing with payments and cash options
are tallied for each of the appropriate categories. The totals
are summed for all categories when the report is run.
Non-Cash Adjustments
Transactions recorded for non-cash adjustments are tallied for each of the
appropriate categories. The totals are summed for all categories when the
report is run.
Agreement Charge Off Summary
Transactions recording the amounts charged off to bad debt are tallied in this
area. The equipment charge is reported separately in the next block.
Unit Charge Off Summary
Transactions charging off agreements are tallied to report
the charged-off equipment charges and the number of units represented
by the amount in this area. Rent and other charged-off income
are reported in the Agreement Charge Off Summary block.
Fee Waivers
If either late fees or insurance fees are waived when
a payment is collected, a negative value of the amount waived
is recorded in the transaction register for that field. During
end of day processing, Rentpro will sum these amounts to record
them in the fee waiver block. The number of agreements having
their fees waived also is tracked.
Insurance Penetration
When an agreement is created, if the agreement was set
up on an insurance or damage waiver plan, the payment type field
of the transaction register is set to a number greater than zero
(it is actually set to the ordinal value of the insurance flag).
Therefore, when the transaction register is processed during
end of day processing, Rentpro tallies the number of agreements
that were established with the insurance plan and divides this
number by the Gross Production value yielding the insurance penetration
percentage. Note that agreements put on the insurance plan after
the agreement was created, by editing the insurance flag at the
query screen (see page 29), are not included in this insurance
penetration figure. Only agreements set up on the insurance plan
when they were created are included in the percentage.
Agreement Information
Agreements may be set up on a pay period by pay period
basis by entering a zero for the number of payments prompt at
the new agreement screen (see page 22). Such agreements are said
to be agreements without term. The average maturity is separated
for agreements with term and agreements without term. The average
maturity is calculated by summing the number of days between
the delivery date and the next payment due date for every agreement
within the proper category (those with and those without term).
The sum for those with term is then divided by the number of
agreements with term (the value N), and the sum for those without
term is divided by the number of agreements without term. These
average maturity in days figures are then divided by the number
of days in a month to yield an average maturity value expressed
in months.
The average life remaining value is calculated by summing the number of days
between the next payment due date and the maintenance limit date for each agreement.
This value is then divided by the number of agreements with term, and further
divided by the number of days in a month to yield average life remaining values
expressed in months.
The average term figure is calculated by summing the maturity in days and life
remaining in days for agreements with term, and dividing this sum by the number
of agreements with term. This quotient is then divided by the number of days
in a month to yield an average term value expressed in months.
Deposit Summary
Transactions are processed to produce these values. Payment
transactions (transaction code 1) record the deposit amounts
collected, and these are summed to record the deposit amounts.
The refunds are recorded as transaction code 38, and these are
summed for the refund amount reported.
The total deposits collected value is calculated by processing each agreement
record, not the transaction register. Each record keeps track of the total
deposits collected as well as the deposits on hand. These are summed for each
agreement record to produce the total deposits collected and the total deposits
on hand values. The deposits refunded to customer field is calculated by subtracting
the total deposits on hand from the total deposits collected.
Debit Summary
When the agreement records are processed, any charges
that are due for collection are summed, and separated by rent
due, late and insurance fees, and other debits. These figures
represent manually applied debits. For example, automatic rental
and late fees would not be included in them. However, fees may
be assessed as a debit by the system automatically if a partial
payment is collected on a delinquent agreement, and this amount
did not fully pay the fees being assessed. For example, if only
5.00 were collected toward 20.00 of late fees, the difference
between the amount paid and the amount assessed, 15.00, would
be recorded as a debit on the agreement and the late fee next
due date would be advanced.
Active Agreement Income Projection
Rentpro calculates what would be owed by active agreements
if the present day was actually the last day of the month. The
late fees would, of course, be subtracted out of this total.
The amounts are then broken down by rental income due, insurance
due, other charges due, and tax due. The total income due by
the end of the month includes all charges due on agreements,
less any late fees presently or later due on the agreements.
Note that no estimate is made concerning the number of new agreements
or the future decline in the number of agreements in projecting
income due by end of month.
The total income due by end of month, therefore, is meant to represent the
total amount that may be collected from active agreements by the end of the
month. Both delinquent and current agreements are included in this figure,
but late fees collectable are not included. Agreements with a skip status (K),
hold status (H), or any status other than active (A) are not included in these
values.
Total Monthly Billing
The total monthly billing is the total taken from the
break down of the billing described earlier (see page 56). It
represents the total amount expected to be collected every month.
The total number of agreements and the total number of units
also is summed from the billing area described earlier. These
figures represent the true number of agreements and units that
make up this total monthly billing. The average agreement income
per month is calculated by dividing the total monthly billing
by the number of agreements comprising this figure. Note that
agreements with any status other than active (A) are not included
in this figure. The average unit income per month is determined
by dividing the total monthly billing by the number of units
represented by it.
Bank Deposit
The bank deposit shown is what is the amount of the actual
physical bank deposit as entered by the user. The expected bank
deposit calculated by Rentpro is shown next to it. Any discrepancy
between the actual bank deposit and the expected bank deposit
represents the change in the cash drawer balance for the next
day of business. For example, if the actual bank deposit is 5.00
less than the expected bank deposit, and the beginning drawer
balance for the day was 200.00, then beginning balance for the
next day would be 195.00. The way for this to occur is if the
user entered 195.00 for the next day's beginning drawer balance,
instead of 200.00, when he began End of Day Processing to close
out the day of business.
Expected Bank Deposit
The expected bank deposit is the income summary total
plus any deposits collected that day, plus the over/short cash
and credit amounts, less any petty cash disbursements. Note that
this expected bank deposit assumes the cash drawer balance will
remain the same. If the expected bank deposit does not match
the bank deposit, the difference should be found in the beginning
drawer balance for the next day of business.
Inventory Summary
When the inventory records are processed, they are tallied
according to status and category code. These sums are reported
in the inventory summary, with subtotals for every category code
with the same first character. Percentages are calculated for
the grand totals using for a denominator the number of units
currently active, that is, the number of units on rent, on loan,
idle, on service, and on floor.
