Every product Rhythm sells has one financial configuration, no matter which application sells it. This setup tells Rhythm where to post the product’s revenue, which receivable and write-off accounts to use, whether to defer or split revenue, which merchant account receives card payments, and which tax class applies. When you post a batch, Rhythm reads this configuration for each sale of the product.
What It Controls
- Where a sale's revenue posts — the revenue account, which you must choose before you can save the configuration.
- The receivable, write-off, inventory, and cost-of-goods accounts for this product, when they need to differ from the business unit’s defaults.
- A department, accounting project, and merchant account for this product, when they need to differ from the business unit’s defaults.
- Whether and how the product's revenue is deferred — earned automatically from dates supplied by the selling application, such as a membership term, by rules based on the sale month, or on fixed calendar dates with set percentages.
- Whether the product's revenue is split across several accounts, by percentage or fixed amount.
- How a sale of this product is settled between business units, when the product is sold through a batch for a different business unit than the one on the configuration.
- The tax class used for this product’s sales.
When you review an invoice or query result, the product and product type you see for a sale may come from the product’s financial configuration instead of being stored directly on the invoice record. If a result looks unexpected, check the configuration first.
Where to Find It
You can open financial setup in two places:
- From a product list — Finance & Billing › Setup › Miscellaneous Products, Finance & Billing › Setup › Donation Products, or Finance & Billing › Setup › Legacy Products — by choosing Financial Setup on the product’s row. Other applications use the same action on their own product lists. A membership package’s setup is under Setup › Membership › Packages, beside the dollar-sign icon; a chapter’s dues products have their own financial configuration under the chapter; awards support revenue splits on their application fees; and merchandise and sponsorship opportunities open the same Financial Setup from options on their own record.
- From the batch posting review, when the batch includes a product that does not have a financial configuration yet, by choosing Advanced... or Configure Due To/Due From... for a product sold through another business unit’s batch.
If you build a query to find products that are missing financial setup, build it from Finance & Billing instead of Orders and Inventory or another selling application. The product financial configuration lives in Finance & Billing.
Prerequisites
You need the permission your administrator grants for product financial setup. On Collect’s own product lists, opening the list also requires an administrator-level permission, so a Collect administrator usually sets financial configurations from those lists.
The Settings
| Setting | Options | Default | Effect |
|---|---|---|---|
| Revenue account | An account of the configuration’s business unit | None; required | Every sale of this product posts revenue here |
| Receivable, write-off, inventory, and cost-of-goods accounts | Accounts of the same business unit, or blank | None | If you leave these blank, Rhythm uses the business unit’s default accounts |
| Department, accounting project | The business unit’s departments and projects, or blank | None | Adds reporting classification to this product’s postings |
| Merchant account | A merchant account of the same business unit | None | Every card payment for this product goes to this merchant account instead of the business unit’s default. This is sometimes called Merchant Account Routing |
| Tax class | A tax class from Commerce | None | Sets the tax treatment for this product’s sales |
| Deferred revenue | Off; automatic (by the selling application’s own dates); relative dates (rules keyed to the sale’s month, with a fallback); fixed dates (calendar dates, each earning a set percentage) | Off | Recognizes this product’s revenue over time instead of all at once |
| Revenue splits | Off; on with one or more rows, each a percentage or a fixed amount | Off | Divides each sale’s revenue across the accounts you choose |
| Inter-business-unit due to/due from | Off; on with one row per other business unit, each with an accounts-receivable and a liability account | Off | Records what one business unit owes another when this product is sold through the other unit’s batch |
Warning
Every G/L account, project, and merchant account you choose here must be for this configuration’s own business unit. If you choose one that belongs to another business unit, Rhythm refuses the save.
Warning
Don't set a product's receivable account to the same G/L account as its revenue account. That overstates revenue, because receivables and payments post against the revenue account instead of being tracked separately as accounts receivable. The same overlap can also make an inline bundled purchase’s accounting look like it allocated incorrectly, even when posting worked as designed.
Tip
Tax behavior can differ by how a product is sold. For example, event registrations might need to charge the event’s own country tax regardless of the purchaser’s location, while sponsorship or order-based sales might need to use the purchaser’s address. Since each product’s financial configuration has only one tax class, set up separate tax zones and tax classes in Commerce for each pattern you need, then assign the matching tax class to each product.
Setting Up a Product's Financial Configuration
- Open the product’s list, such as Finance & Billing › Setup › Miscellaneous Products.
- Choose Financial Setup on the product’s row, or choose Advanced... beside an unconfigured product while reviewing a batch to post.
- Choose the revenue account. This is the only required account.
- Fill in any receivable, write-off, inventory, cost-of-goods, department, project, merchant account, or tax class this product needs beyond the business unit’s defaults.
- Turn on deferred revenue, revenue splits, or inter-business-unit settlement if this product needs them, and fill in their rows.
- Save.
Result
Rhythm uses this configuration the next time the product is sold and its batch is posted. There is no separate confirmation step; the setup takes effect immediately.
Tip
If you are posting a batch and see several unconfigured products, the posting review can give all of them a revenue account in one pass. This shortcut sets only the revenue account, so open the product’s own Financial Setup afterward if you need to add anything else.
Deferring Revenue
Deferred revenue holds a sale’s revenue in a deferred revenue account, which becomes required when you turn deferral on. Charges on a product or package do not create a deferral schedule unless deferral is turned on for that item and its deferred revenue account is set. Rhythm then recognizes the revenue over time instead of all at once, using one of three strategies:
- Automatic — revenue is earned over dates the selling application supplies for that product type, such as a membership’s term or an event’s dates. For an event product, if the sale posts after the event has already ended, Rhythm recognizes the entire amount in the month it is posted instead of spreading it across the event’s dates.
- Relative dates — you define rules based on the sale month, with each rule covering four months, plus a fallback for months that no rule covers. Adjacent rules must not share a month. Each rule uses the transaction’s own sale month and the deferral date you configure for it, so you can push only the portion of revenue that belongs to a later period into that period. This differs from the automatic strategy, which spreads everything evenly starting immediately.
- Fixed dates — you list calendar dates, and each date earns a set percentage of the sale. The percentages across all dates must add up to exactly 100. For example, putting 100% on a date early in the next fiscal year keeps any payments collected before that date in deferred revenue until then, so they are recognized in the later fiscal year.
Keep the revenue account and the deferred revenue account separate. Associations typically use different accounts for each so they can track the liability and the recognized revenue distinctly. Using the same account for both generally suits only an association that recognizes this product’s revenue immediately as part of its accounting approach.
Warning
Rhythm does not stop you or warn you if you turn deferral on or off, or change its strategy, after sales have posted with the old settings. This setup screen does not explain what happens to revenue already recognized under the old rule, and previously generated deferral waterfalls and breakdowns for existing sales may not update to reflect the new setting until the related batches are reprocessed.
Tip
If Deferred Revenue Recognition is turned on for a product, editing other accounting settings on it, such as its G/L codes, can prompt you for a deferral date before the save completes. If you do not need deferral on that product, turn it off to save without providing one.
Tip
If your association manages deferred revenue outside Rhythm, consider turning deferred revenue off for that product and using revenue splits instead to direct its revenue to the accounts you want. With deferred revenue on, a received credit-card payment can post through the merchant account’s own G/L mapping instead of the product’s own revenue account.
Splitting Revenue
A revenue split divides one sale’s revenue across several accounts instead of posting it all to one account. You can split by percentage or by fixed amount. Percentage splits for one configuration must add up to no more than 100. Splitting works independently from deferral, so you can defer and split the same product’s revenue at the same time.
Warning
If any split row in a configuration uses a fixed amount, Rhythm does not check whether the percentage splits total no more than 100. Do not mix fixed-amount and percentage splits if you rely on that check.
Dependencies and Precedence
- Merchant Account Routing splits mixed orders so each product's payment reaches the right account. When an order contains products with different merchant accounts configured, Rhythm splits the order so each product’s line item routes its payment to its own configured merchant account instead of forcing the whole order through one account.
- Every account, project, and merchant account named here must belong to this configuration’s business unit. Rhythm does not check the department or tax class against the business unit.
- If you change a product’s business unit after its financial configuration exists, the configuration does not update automatically, and its accounts may no longer be valid for the new business unit.
- The business unit’s default accounts apply to any receivable, write-off, inventory, or cost-of-goods accounts you leave blank here.
- If a product has no financial configuration at all, its revenue posts to the business unit’s Missing Product Revenue account instead. This is a separate fallback account set on the business unit, distinct from its Deferred Revenue account. Review your business unit’s Revenue, Missing Product Revenue, and Deferred Revenue account setup before posting a batch that includes unconfigured products.
- When a product is sold through a different business unit’s batch and uses inter-business-unit due to/due from, posting also depends on matching due to/due from setup on the other business unit’s own configuration. Both sides need their accounts mapped for the settlement to complete.
Change Impact and How to Revert
- Changing where revenue posts takes effect for sales posted after the change. Sales already posted keep the accounts they were posted with.
- Deleting a financial configuration is not refused, even if sales have already posted with it. The next sale of that product with no configuration is treated as unconfigured again.
Warning
Rhythm refuses to delete an account, project, tax class, or merchant account while a financial configuration still names it. The exception is a department, which can be deleted from under a configuration with no warning. Before deleting an account, check whether any product’s financial setup still names it.
- Deleting the product, or the business unit it belongs to, deletes its financial configuration too. Deleting a business unit deletes every configuration filed under that business unit, including configurations that name products belonging to other business units.
Permissions
You need the permission your administrator grants for product financial setup, plus the permission that lets you open the product list or batch posting review you are working from.
Validation and Errors
Rhythm refuses the save if you do not choose a revenue account. It also refuses the save when fixed-date deferral percentages do not total exactly 100, or when relative-date rules overlap, and the message names the problem. If a revenue split’s percentages total more than 100, and no split in the configuration uses a fixed amount, Rhythm refuses the save. Rhythm also refuses the save if any account, project, or merchant account belongs to a different business unit than the configuration’s own.
Saving a configuration with revenue splits turned on can sometimes fail with a Revenue Splits validation error even when the percentages already add up to 100. This has been seen on membership packages as well as merchandise and miscellaneous products. If re-saving an existing fixed-amount split fails this way, try switching that split’s type to Percentage, saving, then switching it back to Fixed Amount and saving again. Separately, if orders for a product with revenue splits turned on are not generating the subledger entries you expect, or their batch will not post, check the split configuration. This has been seen with revenue splits in some cases.