A business unit is a separate set of books in your Rhythm account, such as your main association, a related foundation, or a political action committee. Every invoice, payment, and G/L account belongs to one business unit. Before finance staff can invoice or take payments in a business unit, an administrator must set up its currency, fiscal year, revenue accounting method, accounting software download, and default accounts.
What It Controls
A business unit controls settings that stay fixed for its lifetime, including its base currency and fiscal-year start. It also controls when revenue is recognized, where transactions post when no more specific account is set, and which invoice, receipt, and download templates it uses unless another template overrides them.
Everything else in Finance & Billing, including invoices, batches, and the chart of accounts, belongs to one business unit. An order can also be tied to a business unit before invoicing through its pro forma invoice.
Because every invoice, payment, and batch belongs to one business unit, you cannot apply a credit from one business unit to an invoice or registration in another. After a payment or other transaction is processed, you cannot change its business unit or move it into a batch for a different business unit. You also cannot reassign an existing invoice to another business unit, so create new transactions in the correct business unit instead of trying to move history across that boundary.
Where to Find It
Go to Finance & Billing › Setup › Business Units to see every business unit in your account. Select Create Business Unit to add one, or select a row’s Edit icon to change one. Select a row’s Clone icon to create a business unit with another business unit’s settings already filled in.
The Settings
| Setting | Options | Default | Effect |
|---|---|---|---|
| Name: | Any text | Blank | The name people see when they choose a business unit |
| ID: | Letters, digits, and underscores | Suggested from the name | The permanent identifier for the business unit. It prefixes every G/L account, bank account, department, and accounting project you create in this business unit. You set it only when you create or clone the business unit, and you cannot change it later |
| Status: | Active, Inactive | Active | Whether people can use the business unit |
| Start of Fiscal Year: | A month | January | The first month of the business unit’s fiscal year. You set it only when you create or clone the business unit, and you cannot change it later |
| Base Currency: | A currency | USD | The currency used for every report in this business unit. You set it only when you create or clone the business unit, and you cannot change it later. When multi-currency is on, amounts entered in another supported currency also show converted into the base currency across finance reports, such as subledger entry reports, the deferral waterfall, A/R aging, and the trial balance, along with related pricing and transaction displays |
| Multi-Currency | On, off | Off | Whether the business unit accepts transactions in currencies other than its base currency. This setting appears only when multi-currency is turned on for your account |
| Currency Fluctuations/Rounding G/L Account: | A G/L account | None | The account where currency rounding differences post when Multi-Currency is on |
| Currency: (Supported Currencies) | A currency, per row | None | Other currencies this business unit accepts in addition to its base currency |
| Accounting Method: | Accrual, Cash | Accrual | Accrual recognizes revenue when you invoice. Cash recognizes revenue when you receive money |
| Default G/L Accounts (Accounts Receivables, Deferred Revenue, Overpayment Liability, Store Credit Liability, Inventory, COGS Expense, Bad Debts, Missing Product Revenue) | A G/L account, each | None | Fallback accounts used for posting and month-end close when nothing more specific applies. These fields appear only after you save the business unit |
| Inter-Business Unit Due To/Due From Accounts | An Accounts Receivable and a Revenue G/L account, per other business unit | None | Records what one business unit owes another when a transaction spans both. These fields appear only after you save the business unit, and only when your account has more than one business unit |
| Inventory Costing Method | Do not perform inventory costing, First In First Out (FIFO), Last In First Out (LIFO) | FIFO | How this business unit costs merchandise it sells |
| Default Write Off Method: | Allowance, Direct | Direct | How this business unit writes off unpaid balances by default |
A G/L account you just created may not appear in these default-account dropdowns right away. If an account is missing, wait a few minutes and open the form again before assuming it was not saved.
Inter-Business Unit Due To/Due From Accounts record what one business unit owes another when a transaction spans both. They do not split one order into separate charges on different merchant accounts, and they do not automatically create the matching entry in the other business unit.
Rhythm keeps the balance and its subledger entry with the business unit where the transaction happened for audit trail purposes. You handle the money movement between business units, and clear the balance after that movement, in your financial management system because Rhythm does not include a settlement or clearing action for this.
You can also configure these accounts at the product level, such as on merchandise, membership packages, and certification application fees. With product-level setup in place, a purchase can drive the inter-business-unit posting on its own.
When products from different business units appear on the same order, missing or mismatched due-to/due-from setup between those business units can block the order or its batch from processing. A batch with transactions from more than one business unit should otherwise post successfully after you configure these accounts. If an event’s own business unit differs from the business unit of the credit or payment you are posting against it, that mismatch can affect whether the due-to/due-from posting succeeds.
The same page also sets the business unit’s accounting software, batch download format, and default document templates. A business unit's financial settings determine which QuickBooks account its posted batches are sent to, so make sure each business unit is tied to the correct QuickBooks account before you rely on posting to route batches there automatically. See Accounting Software, Downloads, and Document Templates.
Dependencies and Precedence
- Fallback accounts only. A default G/L account is used only when a more specific setup, such as a product’s own revenue account, does not name one. A product’s own account always takes precedence over the business unit’s default. Even after you correct a product’s finance and billing setup, batch posting can still fail with an Accounts Receivable error if the business unit’s default Accounts Receivable account is not set, because posting checks both levels.
- Currency must match. Every G/L account and bank account you create in a business unit must use a currency the business unit supports.
- Fiscal years follow creation. When you save a new business unit, Rhythm automatically creates its first two fiscal years so it can accept transactions right away.
Change Impact and How to Revert
Base currency and fiscal-year start can never change after you create a business unit, so plan both carefully before your first invoice. You can change everything else on this form later, with two exceptions:
- Accounting method can be switched between accrual and cash at any time, except when the current open fiscal period has a posted or downloaded batch. If you try to change it then, Rhythm refuses the change and tells you how many posted or downloaded batches are blocking it. Unpost the batches or wait until the period closes, then try again. In some cases the change has still failed even after every blocking batch was unposted and recurring batches were disabled; if that happens, wait a few minutes and try again, or contact Support if it still won't save.
- Renaming or changing defaults takes effect immediately for new activity, but it does not rewrite history that has already been posted.
To retire a business unit you no longer need, change its Status: to Inactive instead of deleting it. This keeps its history on file while hiding it from ordinary use.
Permissions
You need the Collect Administrator role to create, edit, or delete a business unit. This role grants the Finance & Billing administration permissions used throughout Setup. See Set Access and Permissions in Finance & Billing.
Validation and Errors
- A Name: and an ID: are both required, and the identifier must contain only letters, digits, and underscores.
- Every supported currency must be different from the base currency and from every other supported currency. Rhythm refuses a duplicate currency or the base currency itself.
- Rhythm refuses a change to the accounting method while the current open period has posted or downloaded batches, and the message tells you how many batches are blocking the change.
- If a batch fails to post because Rhythm cannot find a product’s revenue account, and the product’s finance setup already looks correct, check the business unit’s Missing Product Revenue default under Default G/L Accounts. Entering a valid G/L account there has resolved this kind of posting failure.
- The Trial Balance report summarizes a business unit's general ledger activity for a selected accounting period: the starting balance, debits, credits, and ending balance for every G/L code in that business unit. You can change the accounting period the report covers. If the Trial Balance report shows no results, check whether its business unit filter is still set to a business unit that is no longer available, such as one you marked Inactive. Switching the filter to a valid, active business unit restores the report.
- Rhythm refuses to delete a business unit while it still has G/L accounts, bank accounts, or accounting projects. You must delete or move those first. Any departments that belong only to the deleted business unit are removed with it. Deletion can also be blocked by other related records, such as invoices, fiscal years, or a default batch relationship, and the page does not always offer a way to clear those dependencies yourself. If a business unit will not delete for a reason you cannot resolve here, set it to Inactive instead, or contact Support.
Related Tasks
After your business units exist, set up their chart of accounts, bank accounts, and reporting dimensions in Chart of Accounts, Bank Accounts, and Reporting Dimensions. Connect each business unit to your accounting software and document templates in Accounting Software, Downloads, and Document Templates. To decide who can make these changes, see Set Access and Permissions in Finance & Billing.