Accounting and Payroll Monthly Responsibilities

• Monthly Client Invoicing for Plans and Projects
• Reimbursable Expenses
• Accounts Receivable—sending and receiving invoices, late payments, set up ACH
• Payroll administration for contractors
• Payroll for employees
• Transactional postings for the Checking, Savings and PayPal account. Tag reimbursable expenses
• Onboard and maintain accurate information in Gusto and Harvest for contractors
• DM Dollars. Prepare and deduct credit notes as earned and redeemed.
• Follow and make reasonable updates to A/R process
• Use and monitor billing@digitalmeaning.co email address for third party communications on behalf of DM
• Copywriting for DM Dollars Letters, Invoices, A/R Letters, etc.
• Support for taxes consultant

Client Payment Terms

As of January 1, 2021, Fees for marketing subscription plans are invoiced in advance, on a monthly basis, in accordance with the Fee provision in each SOW. There will be no refunds or credits for partial months, downgrades, or unused months.

Services that exceed the scope described in the corresponding SOW will be invoiced separately, at applicable rates. Additional Services and projects with their own corresponding SOW will be invoiced on the last day of each month or upon project completion—whichever comes first.

Unless otherwise provided in an applicable Statement of Work, payment will be due net 15. Any amounts not paid within 30 days of the invoice date will accrue an interest rate of 2% per month until paid. Until invoices are paid, we reserve the right to withhold deliverables, licenses, and any materials for which expenses were incurred on your behalf.

In the event your account becomes more than 60 days delinquent, we reserve the right to take any and all legal action necessary to secure outstanding payment.

Creating Invoices

Set up a recurring invoice once the contract is signed for plans and projects.

1. When it is time to send, the recurring invoices will show up under the invoices tab.
2. Copy over to Xero in draft mode
3. Open the draft bill in Xero and add each reimbursable expense as one line item. [Use account Reimbursable expenses]
4. Add another line item for the Markup on each reimbursable expense. Do the math inside the cell [Reimbursable Expense * 20% markup]
5. Approve the bill in Xero
6. For Harvest put the total for expense + Reimbursable expense in the expense line item. The client should not see markup amounts.
7. Send from Harvest. Do NOT override on Xero. Or it will override the Expenses.
8. When it sends from Harvest it should appear as Sent in Xero.

Tip. If you just put Xero and Harvest screens right next to each other as a split screen then you can work double as fast. Doing the Xero bill first, and copying over to Harvest. This whole process really is a 30-minute process. Split Screen: https://support.apple.com/en-us/HT204948

Invoice Structure

• Subject = [Month] Project or Plan Name
• Item Type = Services, Additional Services, Expenses, 2% Late Fee or Credit
• Description = For plans use related copy template. For projects, refer to SOW. For expenses, name & describe the company.

Item Types.

• Services = Work outlined in a signed SOW
• Additional Services = other items that are approved on top of approved SOW services
• Expenses = 3rd party licenses, tools, and consulting
• 2% Late Fee = The description both is a quick read for which invoice the late fee is for, as well as the number of days late increments: 30 days, 90 days.

[Late Fee] Invoice 912—30 days past invoice date

• Credit = for DM Dollars applied ahead of time or any other discount

Sending Invoices

Billing contacts in Harvest

Here are the Billing Contacts in Harvest

To make changes.

1. Open Harvest, and click on the Manage Tab.
2. Click the green button called "+New Client"
3. Fill out the fields, Client Name, Address
4. Click the green button called "Save Client"
5. Now that you've added a new client, you can add client contacts by going back to the "Manage Tab"
6. Look for the client in the list and select "+add contact" next to the client.
7. Fill out all the fields. If there are special instructions, like only sending to one person and no one else, please add an "*" next to their name.

Legend to follow

• asterisk (*) indicates the primary contact to send all invoices too
• parenthesis information indicates who else to cc for which project, or (all Invoices)
• Billing Contact is who to follow up with for payment or issues. This person could also double as the primary contact to send the invoice to in some instances.

Additional documentation about specific billing instructions are in box > Client Invoicing Documents (https://digitalmeaning.box.com/s/gbe0h1gbmjzoza0a3mqg3f3tn6ed49fg)

Receiving Payments

You'll know a payment has been made by either receiving a check OR if it is through ACH, you'll find out through Xero or WF. If payment is made through Harvest (credit card/stripe) it will automatically apply the payment to the invoice.

Once you receive payment follow these steps to mark the invoice paid. When a payment is marked as paid in Harvest, it will sync with Xero.

1. Go to Harvest/Invoice Tab
2. Select the invoice that was paid
3. Click the Record Payment button.
4. Add payment date, amount, and note about the payment (see specifics below).
5. Click the "Save Payment" button

• Payment Date. This should be the date the money is going to be in the bank account.
• Amount. Record the amount paid.
• Notes. Indicate how the payment was made—either check or ACH. Include the check number or transaction number. If the amount doesn’t match, the client may have used a credit note. Find it in Xero and apply it to the rest of the balance. Then, go back to Harvest, add another line item for "Credit" with the CN number in the description and the credit amount subtracted so the invoice totals to $0. Do not sync again to Xero.

How to Set up ACH Payments

• Routing Transit Number: 121042882
• Bank Name: Wells Fargo Bank
• Beneficiary Account Number: Find checking account number in Xero
• Beneficiary Account Name: Digital Meaning LLC

**Sample email to billing contact S/L Company Name + Digital Meaning

Hi Martin,

My name is Adrianna Larson with Digital Meaning, UCT’s digital marketing partner. Cheryl Knepfler passed along your information as a billing contact.

I’m reaching out to see if you’d like to set up ACH for easier payments for your monthly invoices from us. If you sign up, we’ll provide a one-time $100 credit towards your next invoice.

The following is our bank information to set it up:

• Routing Transit Number: 121042882
• Bank Name: Wells Fargo Bank
• Beneficiary Account Number: Find checking account number in Xero
• Beneficiary Account Name: Digital Meaning LLC

Reimbursable Expenses.

To the extent, Digital Meaning incurs any third-party expenses on a Client's behalf (including but not limited to advertising spend, stock art, custom artwork, print production, consulting, email marketing, marketing automation, and social sharing tools), the Client agrees to reimburse Digital Meaning for such third-party expenses, plus a service fee when expenses are approved in advance by Client.

3rd party expenses are not tracked in Harvest. They’re tracked only in Xero where they’re assigned to clients separately to be billed as ‘Reimbursable Expenses’

1. Check Law, Money, Taxes> Accounting, Financials > [YYYY] > [YY-MM] > Reimbursable > [Client-Vendor-XXX] for client-approved reimbursable expenses receipts. Meaning you don’t have to ask: ‘is it ok to invoice client for this?”
2. During reconciliation, add the related expenses to the Reimbursable Expense account
3. Click add details to "Assign expenses to the right Client
4. "Attach the receipt to the transaction in Xero.
5. When the client is invoiced in Xero, add the open expenses (Xero will indicate if there are any), coded to “Reimbursable Expense”. Add a new line with the 20% markup coded to “Markup on reimbursable Expense” which is an income account.

Description example for Harvest

[Third Party Marketing Tool]

• Buffer - A smarter way to share on social media
• Briteverify—Email verification to improve deliverability and opens.

[Stock Photography]

• Image for newsletter and article landing page.

Expense

as of February 28, 2020 Partners are third-party Consulting. This includes Traction on Demand, Myleen Photography, Stamen Media. For these, we bill the 20% markup fees to the Commission cost center, as opposed to Mark up on Reimbursable Expenses.

Late Payments.

• Due Date = 15 days with Invoice Message.
• Payment Terms = Net 15
• Day 16 = Gentle Reminder | Invoice is past due if you don't pay by 30 days of the invoice date, a 2% late fee will be applied on the next invoice.
• Day 31 = Late fees are applied to the next invoice. With a note that says the 2% late fee has been applied and why. [ex. Invoice 912—30 days past invoice date.]
• Day 35 = starts letters from billing@digitalmeaning.co
• Day 45 = Personal phone call (from Jen) asking for payment, and offering to remove the late fee if you pay today.
• Day 60 = Letter 2
• Day 75 Final notice or a phone call communicating that we understand and we'll need to stop work until this is resolved.

Letters in this Google Doc

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Payroll

Time Tracking Only Process (Contractors).

Contractors who time track only are paid by the 8th of each month.

• Contractors enter their time in Harvest in real-time.

• Each week, they submit their timesheet for approval

  Automated through Harvest. Right now people are reminded at 4 pm on Thursdays. Here is how to change it: https://support.getharvest.com/hc/en-us/articles/360048687691-What-does-Timesheet-Deadline-do-

• For auditing purposes, take a snapshot of 1H on the 16th of each month. Save it to the monthly financials box folder. Here is how: https://soapbox.wistia.com/videos/0AzNCh7wB1

• At the time of payment, go to Reports > Contractors, select the time period you are paying out for. And Check approved hours

  We can’t approve in the middle of the week or people can’t add time for the rest of the week. So for the month’s end, we’ll approve at the end of the week. And then payments can be administered.

• Print out the page using the print function in Harvest so the styles stay intact.
• Save in the corresponding month in Monthly Business Reviews.
• Click on the hours listed to each individual Contractor > Group by Client > Print
• In Xero, create a Bill for each contactor.
• Add a line item for each client and then attach the individual Harvest report, as well as any invoice that the contractor/partner may have sent to billing@digitalmeaning.co. Here is a sample bill
• Make payments through Gusto and include the memo for the time period we are paying them. We pay at the end of every month, so it would typically be something like “January 2019”
• Mark the invoice in Xero paid through Checking account

How to Pay an International contractor when you can't through Gusto: Use Wise (formerly Transferwise).

Here is a list of the countries Gusto does support. They currently don't support Germany.

Contractor to pay with Transferwise: Christoph Merdes who lives in Germany.

Steps for a contractor to set up an account.

1. Here's a video to share with the contractor so they can set up an account if they don't already have one.
2. Confirm with Digital Meaning that you've set up an account, and provide us with the following information.

How to make the payment.

1. Login to Wise (formerly TransferWise)
2. Selet Digital Meaning Account
3. Click the green “send money” button on the left, then select single payment
4. Make sure the You Send Box is set to “USD” and the Recipient Gets box is set to EUR
5. Enter the amount of the invoice/amount in USD owed to the contractor in the “you send” box
6. Click “See Calculation” arrows
7. We cover the fees to pay contractors so add the USD Total fees to the Total Invoice amount you previously entered, and adjust that number until the “Amount we’ll convert” number is equal to the invoice/amount.
8. Click continue
9. Under recipients select an existing recipient or add one.
10. Fill in the address information if you are prompted.
11. Pay contractor.

Contractors who send bills

Contractors are given the option to send an invoice….or have an upfront contractual agreement with a payment schedule. For these, we would set up scheduled bills for them.

Employees

Bi-monthly

• Confirm payroll is being run along with any necessary cash requirements.
• Confirming time off taken (sick/vacation) per time period
• Review any open Gusto tasks and handle them
• Communicate any changes or updates made by Gusto. (example. tax rate changes)

See DM People Guide for up to date Payroll and Benefits info. And company holidays, which you can also find in Gusto.

Sales Commission

The percentage of the first month's revenue of the plan would increase based on the number of months you sell it for. You make a commission on the first month, but the longer the contract, the higher the commission.

• 1-month = 5%
• 3-months = 10%
• 6-months = 15%

• 12-months = 20%

• 24-months = 30%

• 36-months = 40%

Example. If you sell a Big Ideas package for a 12-month contract, you would get 20% of the monthly recurring revenue rate. $4770 * .20 = $970.

Managing Xero. Reconciling.

• Can we write the rent payments over to an Owner’s Contributions account?
• Journal entries for bills with a credit
• Insurance journal entries—cost spread out over the year
• How Wages & Salaries are managed
• Reallocate up front COGS costs, like Cypress Learning, to show when $$ was actually spent
• How do we remove old expenses that are tagged and we don’t need them anymore?
• Freshworks is Campaign Monitor. we don't know if this is still true
• Pay Pro Global is Bounceless
• Adobe stock photo pricing—Each image we use from adobe stock will cost the client $15 then we'll add our markup which will bring the cost of the image to $18.

  Where do we bill the Adobe Stock Photo fee? Reimbursable? I saw it in COGS.

Payables.

1. All bills should be sent to the billing email, either from the vendor or a DM Team member will email them to billing.
2. Enter the bill in Xero. Here is a shortcut.

   Automatically create draft bills with PDFs attached in Xero Forward bills with PDF attachments to this email address to create draft bills with the PDFs attached // bills.bzv2p.1hfeq5tkxso95h1k@xerofiles.com

3. Once the bill is in Xero, checks that all the fields are correct. Update or fill in the fields that are incorrect. Here is a sample of the fields
4. Marks the bill as approved.
5. Alert operations when the bills are due to be paid, and operations will go into Xero and select a "planned date" to pay the bills based on known cash coming in.
6. On the "planned date" alerts operation which bills need to be paid along with any necessary cash requirements. Accounting pays bills through Gusto and Operations pays bills through WF.

Onboard and maintain accurate information in Gusto and Harvest for contractors

Onboard new contractors

Add to Gusto with agreed upon hourly or fixed fee Invite to onboard themselves Add contractor to Harvest...see Managing Harvest

Maintain

Check once a month, make those we aren’t working with inactive

Law, Money, Taxes File Structure

Year

Monthly Business Reviews

Month

Contractors

Financials

Monthly Project Planning

Operational Expenses

{May 16, 2022} Updated Expenses Process and Invoicing Instructions

{July 24, 2020} Responsibilities

{Oct 30, 2019} New A/R Policy + Updated Law, Money Taxes File Structure + Added Financials Portal

We are no longer capturing expense receipts in BOX, but in Xero instead. So, we archived the Expense folder and are using the Monthly Business Reviews folder instead.

{July 17, 2018} New Billing Steps

During reconciliation, add to Reimbursable expenses account and add details to "Assign expenses to a customer" [example: [stock photography] image of guy for newsletter and then reconcile. // Complete bill without expenses // Copy over to Xero in draft mode // Open draft bill in Xero and add expenses as one line item. [Use account Reimbursable expenses] // Add 20% markup to total amount [We are calculating this on its own line and tracking it to account: Markup on reimbursable expenses // In Harvest calculate each expense type with its markup and put them on their own line // Just send from Harvest. Do NOT override on Xero. Or it will override the Expenses. // Please make sure when you do bills to have the invoice date in the month we are billing for. It helps keep track of monthly revenue and Reimbursable Expenses in Xero. // Make sure to approve invoice in Xero once sent in Harvest

{Aug 22, 2017} We are no longer doing the following.

Adding third-party expenses to Harvest // Adding contractor hours through the expenses module (they are now tracking their own hours) // Adding bills to box // Printing out the COGS every month to make sure we didn't miss anything. We'll just not miss anything due to the new process. // Putting auto-payment bills in Xero (only add bills that need to get paid manually) // Add estimates to Xero // Time Saved: 6 hours / month