This article provides general guidelines and best practices related to the Surcharges functionality.
Separate Line Item Surcharges vs. In-Line Surcharges
Surcharges may be applied to an invoice as a separate line item, or applied in-line to an existing service line item.
Separate Line Item Surcharges
Separate line item surcharges are not automatically credited during pro-ration and are immediately recognized as earned revenue. In addition, these surcharges may be associated to a general ledger code.
In-line surcharges are applied to specific invoice line items during pro-ration. These surcharges leverage the existing general ledger code associated with the service.
Surcharges and Taxes
Surcharges are always applied to pre-tax amounts unless the price is tax-inclusive. For tax-inclusive charges, double-taxation could occur if the surcharge is defined to be taxed separately. It is important that you ensure that a taxable surcharge applies only to tax-exclusive charges.
Surcharges and Revenue Recognition
Surcharges may be associated with accounts receivable (A/R) and with revenue general ledger (GL) codes. A surcharge is fully recognized on an invoice when it is tracked as a separate line item. If it is tracked as an in-line surcharge, then it follows the Revenue Recognition rules of the line item’s service.