Clubs given with Installs

[lorcutt]

Does anyone else have their memberships given with a new install, how do you Show the Deferred Revenue on the membership invoice template if you are saying its "free" or "included" with the install? 

[Steveng · Accepted solution]

We state that it is included in the install and the sales task goes to a liability account.  We had a similar discussion when we first did this with our service memberships years ago.  We went with "included" or "pre-paid" and have a deferred and realized services built into the recurring services of the membership in the invoice template.  The deferred task subtracts from the liability account while the realized service adds to our revenue.  

With that being said we are about to change up our post install memberships to reflect as a monthly membership (ongoing) with a discount applied to the install for 1 year worth of services.  The billing date would be pushed out 1 year by install coordinator (still a work in progress).  Hope this helps.  

[gotobrandi]

Sorry I wanted to add some input from learning the hard way; make sure you have a game plan for how you handle customers that already have a membership when you provide a free membership on their new install. Are you going to give them a credit on their account for the existing membership (careful with that deferred revenue), or put the existing membership on hold until courtesy membership is done, or adjust the dates to include both memberships (again be careful with that deferred revenue and the dates of the recurring services)

[gotobrandi · Accepted solution]

We include it as part of the install sale with a membership task with a value that is built into the job. Then it has deferred revenue and date range so when that when it expires we can sell/renew them into a regular or monthly membership to continue their maintenance and make the requirements for the manufacturer warranty.

[lorcutt]

Thank you for your reply! This is Helpful! 

[Steveng · Accepted solution]

We state that it is included in the install and the sales task goes to a liability account.  We had a similar discussion when we first did this with our service memberships years ago.  We went with "included" or "pre-paid" and have a deferred and realized services built into the recurring services of the membership in the invoice template.  The deferred task subtracts from the liability account while the realized service adds to our revenue.  

With that being said we are about to change up our post install memberships to reflect as a monthly membership (ongoing) with a discount applied to the install for 1 year worth of services.  The billing date would be pushed out 1 year by install coordinator (still a work in progress).  Hope this helps.  

[lorcutt]

Thank you for your reply, this makes sense and is very helpful! I am new in my position as office/ customer service manager and also the service titan champion for my company. Recently found we had 1134 invoice with incorrect GL account on recurring services and its a lot to do with the "free" or included clubs for Installs and employees. 

[Steveng]

Congrats on the new position.  Sounds like you are on the right track.  Glad I was able to help.  If you have any specific questions feel free to PM or email steveng@mattexservice.com.