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Financial Tab

The Financial tab, available when the OPV_<version number> OPERA Vacation Ownership System license code is active, allows users to define the fees and deductions that are associated with an owner contract. Fees are subtracted only after revenue is split between the property owner and the property management company, and fees are not directly tied to a reservation. Deductions are subtracted only when revenue is generated. If a revenue pool is set up, deductions will occur prior to the split between the owners participating in the revenue pool.

Contracts in OVOS define the calculation rules that should take place for the revenue generated for a unit. These calculations will take place in the night audit after a guest has checked out of the unit, unless the OWNERSHIP > NIGHTLY REVENUE SPLIT application parameter is set to Y. During the night audit, the amount allocation to the owner is posted on the owner's account using the internal transaction code 7070I. This transaction code is an internal transaction code and cannot be modified by any user.

The 7070I transaction code is posted as a revenue transaction in the overall balance of the hotel from a cashflow standpoint. It is not revenue to the hotel, but revenue to the third party owner and offsets the revenue taken in from revenue transactions.

By having all postings in the 7070I transaction code, the total revenue created by the hotel remains unaffected by the split that takes place between the owner and the hotel. This is necessary, as otherwise statistical reports would possibly show distorted figures. For example, the Revenue Manager for a property would look at last year's figures and see an average rate minus the owner's portion. This would give an incorrect picture of what was sold during this period.

The Trial Balance displays the 7070I amount and it will also be available for the Back Office Export. This allows the true revenue allocation to be done in the Back Office system of the hotel.

Fees that are automatically posted in the night audit, based on the rules setup in the contract, may be generated revenue if the transaction codes assigned are setup as revenue transaction codes. These amounts will then show in the AR Ledger reports.

Postings and invoices that are created on the owner's account may generate revenue if the transaction codes used are setup as revenue codes. These amounts will then show in the AR Ledger reports.

To define the fees and deductions associated with an owner contract, select Ownership > New Contract to create a new contract, or Ownership > Update Contract to update an existing contact.

Note: If you are updating an existing contract, the Contract Search screen appears. Select the contract you want to work with and then select the Edit button to access the Contract screen.

From the Contract screen, select the Financial tab.

Contract Fees

A fee is an amount that is charged to the owners account on a given basis. It will be charged in the transaction code entered, and will be posted to all owner accounts for this contract.

It is possible to set up fees to be posted with the following schedules: Daily, Monthly, Quarterly, Semi Annually, % of Revenue, Per Stay, Per Night, % on Settlement, or Flat on Settlement.

If Daily, Monthly, Quarterly, Semi annually or annually is selected, the user must also define which day of the month or specific date the posting should be executed.

A fee may be posted to a reserve account, when the OWNERSHIP > RESERVE ACCOUNTING application function is set to Y, and this account will act as an independent account. See Reserve Account for details.

Fee. Select the down arrow to select a fee to post (See Fee Code Configuration for details).

Description. Displays the description for the Fee code.

Schedule. Select how often the fee should be charged to either the owner or to the reservation. Fee schedules that can be assigned to the owner are:

Fee schedules that can be applied to the reservation and included in the calculation of % of (Revenue-Fees) are Per Night and Per Stay.

Reserve Account. Select reserve account to post the fees to. This field is unavailable if the OWNERSHIP > REVENUE POOLING application function is set to Y.

Note: When an Owner Contract is created using a template and is updated due to an update on the template, any Reserve Account attached to a record on Financial tab of the Owner Contract will not be removed.

Trn. Code. Select the down arrow to select a transaction code to assign to the fee.

Amount. Type the amount that will be posted.

Calc. Seq. This is a sequence number that determines the priority of the fees to be applied.

Day/Date/Month to Execute. When Weekly, Monthly, Quarterly, Semi-Annually, or Annually is selected for the Schedule column, the Day/Date/Month to Execute fields appear below the Contract Fees grid. Depending on the value selected in the Schedule field, a user may specify the day of the week, date, and/or calendar month to post the fees. For example, if Weekly is selected in the Schedule field, the Day to Execute field appears. If the user selects Sunday, the fees will post once a week on Sunday's.

Occupied By/Post To. The Occupied by and Post To fields appear if Per Night or Per Stay is selected in the Schedule column. These fields allow a user to establish posting rules for a stay based on the type of occupant. Once the type of occupant is selected in the Occupied By field, select whether the fee will be charged to the reservation, the owner, or Fractional Owner in the Post To field.

Note: The Fractional Owner option is available when the OWNERSHIP > REVENUE POOLING application function is set to N and the contract is a fractional contract. If a fee is selected to be posted to the Fractional Owner it will follow the revenue % from the fractional setup for the period, if it is setup to be posted for the Owner it will follow existing revenue % from the Owners Tab. Post To will be available for all fractional contract fees with at least Fractional Owner and Owner options.

Post After Split. The Post After Split check box appears when the Schedule has been set to % of Revenue or % of (Revenue-Fees). When there is more than one owner on the contract selecting this check box will apply the fee and deductions to the owners after the revenue has already been split up between them. If not selected, then the posting is completed before the revenue is split up between the owners and the fee will be calculated based on the total room revenue without deductions.

Example
Contract 1. A rental contract created with 2 owners splitting the revenue 50/50. The Financial Tab is setup with a fee for 10% of the revenue and is to be calculated after the split and a deduction is setup for $20 per reservation, per night.
Contract 2. Another rental contract is setup with the same setup, except that that the Post After Split checkbox is not selected, meaning that the fee will be calculated based on the total room revenue without deductions.
Here is how each calculation would work with each contract for a reservation against each of the contracts for $100/night, checking the reservations out after one night, and rolling the night audit yields.
For Contract 1, the room revenue is $100 - $20 deduction = $80 to split. Each owner gets $40 and pays 10% of fees based on $80, so there would be a fee of $4. So each owner would receive $36.
For Contract 2, the room revenue is $100 - $20 deduction = $80 to split. Each owner gets $40 and pays 10% of fees based on $100, so there would be a fee of $5. So each owner would receive $35.

Deductions

A deduction represents an amount that will be removed from the revenue that is shared between the hotel and the owner of the unit, before the owner's share is calculated.

Example
A unit is sold for $100 per night and the owner will receive 65% of the net revenue. Assuming a deduction of $5 is setup as a flat amount per stay, the owner would then receive 65% of $95 ($100 minus the deduction of the $5 flat per stay = $95).

It is possible to set up deductions to be calculated based on select formulas. The formulas include Flat per stay, flat per stay night, flat per reservation, flat per reservation night, % of revenue, % of (revenue-deductions).

It is also possible to setup different deductions depending on the type of reservation. The different types include: All Reservations, reservations less than X nights, reservations more than X nights, All transient reservations, all transient reservations less than X nights, transient reservations more than X nights, all group reservations, group less than X nights, group more than X nights.

Code. Select the down arrow to select a deduction to post (See Deduction Code Configuration for details).

Description. Displays the description for the deduction code.

Rule. Select the down arrow to choose a posting rule and change when the deduction is applied.

All Reservations. The rule applies to all reservations.

Res. Less Than Nights. The rule applies to all reservations that are less than the number of specified nights.

Res. More Than Nights. The rule applies to all reservations that are more than the number of specified nights.

All Transient Reservations. The rule applies to all transient reservations.

Transient less than nights. The rule applies to all transient reservations that are less than the number of specified nights.

Transient more than nights. The rule applies to all transient reservations that are more than the number of specified nights.

All Group Reservations. The rule applies to all group reservations.

Group less than nights. The rule applies to all group reservations that are less than the number of specified nights.

Group More than nights. The rule applies to all group reservations that are more than the number of specified nights.

Note: If a "less than nights" or "more than nights" rule is selected, users must enter the number of nights in the unlabeled field directly to the right of the Rule field or they will be unable to save.

Formula. Displays the formula of when the deductions will be applied. Select the down arrow to modify the formula.

Flat Per Stay. Flat deduction amount is applied for each physical stay.

Flat Per Stay Night. Flat deduction amount is applied for each night the guest physically stays.

Flat Per Reservation. Flat deduction amount is applied for each reservation.

Flat Per Reservation Night. Flat deduction amount is applied for each reservation night.

% of Revenue. A percentage of the revenue is applied for the deduction.

% of (Revenue - Deductions). Take a percentage of the total when the Deductions already applied is subtracted from the Revenue.

Amount. Enter the dollar amount or percentage of the deduction.

Calc. Seq. This is a sequence number that determines the priority of the deductions to be applied.

See Also