New equivalent monthly charge options

MuseMinder recently added two new ways to calculate invoices: Equivalent Monthly Charge and Equivalent Monthly Charge – Pro-rate. These methods are meant to be applied to billing for private instruction.

In both of these methods, the manager creates a fee. The amount of the fee is the base rate for each lesson.

Equivalent Monthly Charge is the simpler of the two. If the fee is identified as an Equivalent Monthly Charge fee, the system adds up the total number of lessons, multiplies by the base rate, and divides the total amount due by the number of months of instruction.

If the fee is identified as Equivalent Monthly Charge – Pro-rate, the first month’s lessons will be tallied, and if the student is getting a partial month of lessons the system will create an invoice for the first month that amounts to lessons-times-rate, and then it will add up the remaining lessons, multiply by the rate, and divide evenly over the remaining ones.

Once the first month is pro-rated, the remaining charges are applied equivalently. We say ‘equivalent’ because if there is a rounding difference in the math, the first equivalent invoice is adjusted. If this happens that first equivalent month’s invoice may be slightly different from the subsequent months.

Equivalent Monthly Charge example:

Per-lesson fee is set for $50
Student enrolls September 1 for Thursday classes
40 lessons total, taking into account Thanksgiving closure and 2 weeks in December
System multiplies 40 x $50 for $2,000 overall total
System divides this by 10 months of instruction (Sept-June)
System creates 10 invoices for $200/month starting Sept 1

Per-lesson fee is set for $50
Student enrolls September 15 for Thursday classes
38 lessons total, taking into account Thanksgiving closure and 2 weeks in December
System multiplies 38 x $50 for $1,900 overall total
System divides this by 10 months of instruction (Sept-June)
System creates 10 invoices for $190/month
First invoice is due Sept 15, subsequent are due first of the month

Equivalent Monthly Charge – Pro-rate example:

Per-lesson fee is set for $50
Student enrolls September 1 for Thursday classes
40 lessons total, taking into account Thanksgiving closure and 2 weeks in December
System calculates that the student is getting a full month of lessons in September, and so does not pro-rate
System multiplies 40 x $50 for $2,000 overall total
System divides this by 10 months of instruction (Sept-June)
System creates 10 invoices for $200/month starting Sept 1

Per-lesson fee is set for $50
Student enrolls September 15 for Thursday classes
System deduces that the student is only getting a partial month’s worth of lessons (only 2)
System creates a September invoice for $50 x 2 lessons. One invoice for $100 is due Sept 15 (first lesson date)
This leaves 36 lessons remaining, taking into account Thanksgiving closure and 2 weeks in December
System multiplies 36 x $50 for $1,800 overall total
System divides this by 9 remaining months of instruction (Oct-June)
System creates 9 additional invoices for $200/month, starting Oct 1

Here are some examples that illustrate the rules by which the system would pro-rate the first month:

Student has Monday classes starting July 4
July 4 is a holiday, so the student has three Monday classes in July. Pro-rate partial month.

Student has Tuesday classes that start Tuesday July 12. Pro-rate partial month because they are starting after the first week.

Student has Tuesday classes that start Tuesday July 5, but the 12th is a teacher absence day. Pro-rate because they get 3 lessons instead of 4. Partial month.

Student has Tuesday classes that start Tuesday July 5. In the initial enrollment the system will not pro-rate the first month, because 4 Tuesday lessons would have been put on the calendar. But in agreement with the parent, the studio moves the last two lessons of July into August. The studio administrator can recalculate the charges after the changes are made on the calendar, and the system will pro-rate July to reflect 2 lessons in that month.

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