Mca Skills Section II- Keller Accounting Ed. 1rev

K e l l e r W i l l i a m s U n i v e r s i t y

MCA Skills- Keller Accounting

Susan Cook

Stacia Thompson

A course for the new MCA

Preface

MCA SKILLS SECTION II: KELLER ACCOUNTING ed. 1rev. 2 2006 KELLER WILLIAMS REALTY, INC. ii

Acknowledgments

The author(s) gratefully acknowledge the assistance of the following individuals in the creation of this course:

Norma Vranken

Antoinette Perez

Rose Jamison

Mary Cook

Cheryl Studer

Paula Hoeft

Mimi Hagan

Rita Landry

Michelle Heidt

Jo Lynn Bozer

NOTICES While Keller Williams Realty International (KWRI) has taken due care in the preparation of all course materials, we cannot guarantee their accuracy. KWRI makes no warranties either expressed or implied with regard to the information and programs presented in the course or in this manual.

This manual and any course its used as a part of may contain hypothetical exercises that are designed to help you understand how Keller Williams calculates profit sharing contributions and distributions under the MORE System, how Keller Williams determines agents compensation under the Keller Williams Compensation System, and how other aspects of a Keller Williams Market Centers financial results are determined and evaluated. Any exercises are entirely hypothetical. They are not intended to enable you to determine how much money you are likely to make as a Keller Williams Licensee or to predict the amount or range of sales or profits your Market Center is likely to achieve. Keller Williams therefore cautions you not to assume that the results of the exercises bear any relation to the financial performance you can expect as a Keller Williams Licensee and not to consider or rely on the results of the exercises in deciding whether to invest in a Keller Williams Market Center. If any part of this notice is unclear, please contact Keller Williams legal department.

Material excerpted from The Millionaire Real Estate Agent appears courtesy of McGraw Hill Publishers. The Millionaire Real Estate Agent is copyright Rellek Publishing Partners, 2003.

Copyright notice

All materials are copyright 2006 Keller Williams Realty International.

No part of this publication and its associated materials may be reproduced or transmitted in any form or by any means without the prior permission of Keller Williams Realty International.

Preface

MCA SKILLS SECTION II: KELLER ACCOUNTING ed. 1rev. 2 2006 KELLER WILLIAMS REALTY, INC. iii

TABLE OF CONTENTS

INTRODUCTION .............................................................................................1 Ground Rules 2 What You Will Learn 3 How You Will Learn 5

CHAPTER 1: KELLER ACCOUNTING AND SYSTEMS ....................................... 6 KW Profit Share Accounting Policies and Guidelines 7 Expenses 8 KW Financial Systems 9

CHAPTER 2: BUDGETS AND GOALS............................................................... 10 Using the Profit Share Accounting Policies and Guidelines 11 KW Balance Sheet and Approved Budget Chart of Accounts 13

CHAPTER 3: GOAL SETTING......................................................................... 31 Entering the Market Center Goals 32

CHAPTER 4: START-UP CHECKLIST..............................................................35 Overview 36 Task #1: Computer Requirements Test 40 Task #2: Verify starting date in WinMORE/Defer Transmittal 41 Task #3: Verify defaults in WinMORE 42 Task #4: Enter your Market Center Goals on the KW Intranet 44 Task #5: Verify WinMORE System and Data Files 45 Task #6: Verify your Market Center policies for Associate Royalty and Company Dollar Split 47 Task #7: Review the Profit Share Accounting Guidelines and KW Chart of Accounts 48 Task # 8: Enter Associates, Team and Group Awards, Listings and Pending DAs 49 Task #9: Download latest All Associates file and load into WinMORE 50 Task #10: Enter All DAs for Prevous Months' Commission Deposit in WinMORE 52 Task #11: Order Computer Checks 53 Task #12: Print and Review Chart of Accounts 54

Preface

MCA SKILLS SECTION II: KELLER ACCOUNTING ed. 1rev. 2 2006 KELLER WILLIAMS REALTY, INC. iv

Task #13: Verify KW .XLT Documents 58 Task #14: Enter your Market Center Budget 61 Task #15: Set Up the MYOB Payroll Categories 64 Task #16: Enter All Operating, Money Market, and Escrow Cash Accounts and Activity into MYOB 65 Task #17: Enter All Out-of-Pocket Market Center Expenses 72 Task #18: Set Up Recurring Journal Entries 76 Notes 77

Introduction

MCA SKILLS SECTION II: KELLER ACCOUNTING ed. 1rev. 2 2006 KELLER WILLIAMS REALTY, INC. 1

MCA SKILLS

Introduction

In this chapter, you will

[1] Describe the ground rules for this class. [2] Identify what you will learn. [3] Identify why you are here. [4] Identify how you will learn.

Introduction


Ground Rules 1. Dial into the call on time. 2. Be willing to commit to the 2 hours. There will be minimal breaks. 3. Put your phone on mute unless you are asking or responding to a

question.

4. Limit your side conversations. 5. Accept the reality of time and participation. 6. Respect the different learning styles and opinions of others. 7. Help each other learn because none of us is as smart as all of us working

together to improve our skills and knowledge.

8. Have fun and learn something new!

Introduction


What You Will Learn Keller Accounting Action-Oriented Outcomes

At the end of this class, you will be able to:

1. Use the KW Profit Share Accounting Policies and Guidelines as a resource 2. Identify the various systems used at Keller Williams 3. Assist your OP and Team Leader in determining your Market Center Goals 4. Complete the tasks found on the Start-Up Checklist

Introduction


What You Will Learn

Chapter Topics

1. Keller Accounting and Systems

a. Review the KW Profit Share Accounting Policies and Guidelines.

b. Learn how to categorize expenses. c. Review KW financial systems.

2. Budgets and Goals

a. Examine how the Keller Williams Profit Share Accounting Policies and Guidelines are used.

b. Review the Keller Williams Balance Sheet and Approved Budget Chart of Accounts.

3. Goal Setting a. Review the Forecast Model and your Market Center goals.

b. Enter and submit goals for recruiting, production and finance.

c. Edit submitted goals. d. View changed goals.

4. Start-Up Checklist

a. Use WinMORE, MYOB and the Keller Williams Intranet to complete all tasks on the Start-Up Checklist.

b. Establish the foundation for your Market Center to transmit financials for the first time and operate smoothly on an ongoing basis.

Introduction


How You Will Learn Get ready for some action-oriented training!

In order to learn and succeed, you will:

1. Participate in group discussions. 2. Observe your instructor as he/she demonstrates the skills and techniques.

Are you ready to learn about Keller Accounting?

Keller Accounting Chapter 1


MCA SKILLS

Chapter 1: Keller Accounting

and Systems


[1] Review the KW Profit Share Accounting Policies and Guidelines.

[2] Learn how to categorize expenses. [3] Review KW financial systems.



KW Profit Share Accounting Policies and Guidelines Keller Williams is a realty company unlike any other. Keller Williams is the only real estate company to profit share with their employees and Associates. There are very specific terms and conditions for the Market Centers to support this.

There are various terms you will hear in the Market Center when discussing finances.

Kellerisms

Capper An individual who produces sufficient GCI and contributes enough Company Dollar to the Market Center to satisfy his/her annual commission Cap requirement. (At their anniversary date the Associate starts over. Capping is calculated on CLOSED transactions-pending items at anniversary date are subject to capping rules).

Company Dollar The money a Market Center keeps after all the agents are paid their commissions. The MC uses these funds to pay bills and to make a profit.

GCI Gross Commission Income. The total amount of commission dollars the Market Center receives from a transaction.

Paid On Volume Commission Revenue which an Associate pays toward the Market Center Company dollar prior to fulfilling the MC Cap requirement.

Profit Share Amount of MC profit that is sent to KWRI for distribution to the appropriate Associate in the Profit Share Tree.



Expenses Expenses can be categorized as above the line or below the line. Above the line expenses are also called KWRI approved expenses and are deducted from the market center income before profit share is calculated. Below the line expenses are expenses that are taken out of owner profit AFTER profit share is calculated.

Always review the Profit Share Accounting Polices and Guidelines. It can be found in the Policies & Guidelines Manual on the KW Intranet.

Exercise

Review the Profit Share Accounting Policies and Guidelines with your instructor. The Profit Share Accounting Policies and Guidelines can be found on at http://intranet.kw.com in the Policies & Guidelines Manual. Click on the Resources tab, then on the left hand side of the screen, click on Documents, and then click on Manuals. Download the Policies & Guidelines manual. The Profit Share Accounting Policies and Guidelines are in Addendum A.



KW Financial Systems Keller Williams utilizes two main software programs to keep track of the Market Center production and the financials. WinMORE (Windows Management of Operations in Real Estate) along with MYOB (Mind Your Own Business) business accounting software, can automate and systematize your financial and data processing functions with ease.

WinMORE is a powerful program that helps you record, organize and access information quickly and easily. WinMORE provides your Market Center with the following:

1. Access to huge amounts of data that move through your organization.

2. Precise knowledge of your current sales production standing. 3. Reports on Associate activity: recap reports generated each

month with complete actual monthly and year-to-date figures of production and commissions tracked against associate goals.

4. Projected earnings for the coming months. 5. A way to track each property from sale to closing. 6. Many additional features including: issuing memos to associates

about transactions that did not close on time; producing award reports; and printing commission deposit reports for easy import into MYOB.

7. Provides easy setup of your Associates KW Intranet and web site.

8. A way track and report Franchise Royalty and Profit Sharing for each Associate in your MC.

9. 1099 reporting for commissions to the Associates.

MYOB is a business accounting software used to track the day to day financial business of running a market center.

Note: Real Broker is the accounting software used to track the financials in the Canadian Market Centers.

Budgets and Goals Chapter 2


MCA SKILLS

Chapter 2: Budgets and

Goals


[1] Examine how the Keller Williams Profit Share Accounting Policies and Guidelines are used.

[2] Review the Keller Williams Balance Sheet and Approved Budget Chart of Accounts.



Using the Profit Share Accounting Policies and Guidelines According to the Keller Williams Profit Share Accounting Policies and Guidelines, Keller Williams entire premise of Market Center operations and profit sharing is based on the Approved Operating Budget, the Forecast Model reports, and the WinMORE Market Center Goals.

The foundation for this process is the Forecast Model report. Your Regional Director will assist the Operating Principal and the Team Leader in using and completing this report while developing the business plan. The Forecast Model report is used:

To enter key Market Center goals in the KW Intranet Goal Tracking program. These goals are then tracked against your actual activity month to month in the Market Center reports on the KW Intranet.

With your Operating Budget which is entered into your MYOB Financial software program and tracked against your actual income and expenses month to month.

All Market Center Goals and Budgets must be approved by the Regional Director. After startup, budgets are approved by the Regional Director each year. It is recommended that adjustments be made at mid-year. Any adjustments require the Regional Directors approval.



Using the Profit Share Accounting Policies and Guidelines

Using the Approved Budget Worksheet

In order to determine the profits of a Market Center, certain operational procedures have been instituted and these are intended to provide:

a consistent accounting format for all Keller Williams Market Center operations,

a consistent budget concept so that basic expenses are relatively the same, independent of the Market Center location, and

timely reporting requirements so that maximum efficiency can be obtained with regard to the task of information management.

"Approved Budget Expense Categories" or "Keller Williams Approved Costs" are expenses which are considered essential to the operation of the Market Center under the Keller Williams philosophy and are to be the only expense categories used to calculate the profit for the Market Center for profit sharing purposes. All factors that affect the Market Center are taken into consideration when establishing these expense amounts.

NOTE: During the course of the first year of operation, the Market Center actual expenses for three or six months of operation can be analyzed and the budget adjusted to reflect reality. Regional Directors must approve ALL changes to the budget with a new Approved Budget Worksheet or a Budget Variance Request.

The Approved Budget Worksheet and the Budget Variance Request are on the MCA WebOffice.

Guideline for Agent Account Receivable

It is recommended that Agent Accounts Receivable be kept to a zero balance. The KWRI CEO insists that agents pay their Market Center promptly for all invoices. Market Centers are NOT banks and timely agent payments is the ONLY win-win solution.



KW Balance Sheet and Approved Budget Chart of Accounts

Approved Budget-Income and Cost of Sale

All income and cost of sales budget accounts are derived from your Keller Williams Forecast Model report using reasonable assumptions to interpolate certain account budgets as explained below.

Important Note: Enter your income in the same graduated manner as appears on your KW Forecast Model report.



KW Balance Sheet Standard Chart of Accounts

Current Assets

Acct. # Account Heading/Definition

1-0100/0199 Cash-Operating Checking

MCs primary operating checking account. Owner(s) and Team Leader included on Bank Signature Card. All monthly expenses are paid out of this account.

1-0200/0299 Cash-Money Market Account

MCs depository account. The Owner(s) is the only signature on this account and is responsible for the monthly or semi-monthly transfer of sufficient funds out of this account to the operating account to cover the Market Centers monthly expense budget. If the transfer does not cover the monthly expenses, the Team Leader and MCA are accountable to the owner to justify the variance when requesting additional funds to cover expenses over and above their monthly budget.

1-0400/0499 Cash - Escrow Only

If required by the State REC, this account is used by MCs to account for all escrow funds. ALL transactions coded to this account are offset to the Escrow Payable liability account. The balance of these two accounts must agree.

1-1200 Returned Checks on Hand

When the bank returns bounced deposits, the total amount charged to your account is entered here. This allows tracking of returned items on the Balance Sheet. Once the bounced check is replaced or re-deposited, this account is zeroed out.

1-1160 Undeposited Funds

MYOB keeps cash receipts in this account until the Banking Prepare Bank Deposit is complete. There should be zero balance in this account at EOM.

1-1220 Petty Cash Fund

A MC may choose to have a locked Petty Cash drawer maintained by the MCA with a cap of $100.

1-1310 Accounts Receivable Agents

All agents should pay their invoice by EOM. Demand letters return receipt requested are sent out on all agent invoices past due 90 days or more. If still unpaid, the invoices are written off to Bad Debt Expense and the agent dehired.

1-1320 Accounts Receivable Other

This account is used for miscellaneous AR i.e. if a title company closing check is cut incorrectly; use this account to record the amount due.

NOTE: AR is not allowed between one MC and another MC. These entries are in the form of loans with a signed note and interest OR paid in full by the end of the month.



KW Balance Sheet Standard Chart of Accounts (continued)

Fixed Assets


1-1600/1609 Furniture & Fixtures

1-1610/1619 Office Equipment

Code purchases of furniture, fixtures, and equipment to these two accounts. Normally the break point between capitalizing or expensing purchases of furniture, fixtures, and equipment is $500 per unit cost. Your CPA may choose to write off the cost of assets to expense for income tax purposes but must also provide a depreciation schedule for normal write off for KW profit share over 5-7 years.

1-1620 Leasehold Improvements

Major renovation to the Market Centers lease space.

TOTAL FIXED ASSETS

Total of the three accounts listed above.

1-1700 A/D Furniture & Fixtures

1-1710 A/D Office Equipment

1-1720 A/D Leasehold Improvements

Straight-line depreciation expensed over 5-7 years is accumulated in these accounts.

FIXED ASSETS (Less Depr)

Equals Total Fixed Assets less Accumulated Depreciation.




Other Assets


1-1800/1890 Other Assets MC User Defined

To be used for the Market Centers specific needs

1-1910 Refundable Deposits

Deposits that are to be refunded sometime in the future. This account allows tracking of these items right on the Balance Sheet.

1-1920 Prepaid Insurance

Insurance prepaid for subsequent accounting months/years.

1-1930 Prepaid Expenses

Expenses prepaid for subsequent accounting months/years.

1-1940 Organizational (Start Up) Costs

IRS defined organization costs i.e. legal and CPA reopening fees, state corporation fees, etc. that are paid before the MC opens for business.

1-1945 A/A - Start Up Costs

Accumulated amortization of Start Up Costs. Normally expensed over the life of the Franchise Agreement.

1-1950 Franchise Fee

Initial Franchise Fee paid to KWRI for the purchase of the KW franchise.

1-1955 A/A - Franchise Fee

Accumulated amortization of Franchise Fee. Normally expensed straight line over the life of the Franchise Agreement.

1-1960 Goodwill

1-1965 A/A - Goodwill

Accumulated amortization of Goodwill.

1-9000 Bank Reconciliation Adjs.

Adjustments booked in a transmitted months bank reconciliation are coded here. Then, with a current transmittal date, enter a JE to move the bank reconciliation adjustments to the Income Statement. This account should be zero balance at EOM.




Current Liabilities


2-1000 Accounts Payable

Total of unpaid expenses. Invoices incurred for the current accounting month that arent paid by the end of the month.

2-1020 KWR Excess E&O Reserve Payable

E&O collected from agents in excess of what was paid to the insurance carrier for the same period. The KWRI cap for this account is $10,000 or 25% of the annual premium and is reserved for lawsuit settlements or future E&O increases.

2-1025 Special Events Payable

Book all Excess E&O over the reserve limit here. See Acctg Guidelines for full details.

2-2000 Payroll Taxes Payable

This account contains automatic MYOB Form 941 Payroll accruals and should zero out each month with timely payments to the IRS.

2-2110 Fed Unemployment Tax Payable

This account contains automatic MYOB Form 940 Payroll accruals. Quarterly deposits are made to the IRS and the form is filed annually.

2-2120 State Unemployment Tax Payable

This account contains automatic MYOB SUTA Payroll accruals. The SUTA form is filed and paid quarterly.

2-2140 Escrow Payable

Matches the account 1-0400 Cash Accrual balance.

2-2150 Consortium Fee

Wash account used to collect and pay Consortium Fees to KWRI from all active agents in your MC.

2-2160 Unidentified Income

Commission checks received with no information or Bluesheet.. Place a copy of the check on the agents bulletin board to attempt to track down details of the transaction.

2-2200 Federal Income Tax Payable

Accrual for C-corporation Federal Income taxes.

2-2300 State Withholding Payable

State Withholding is automatically accrued when payroll is processed in MYOB. Timely payment of payroll taxes to the State is required and this account should be zero at end of month.

2-4000/4100 Current Liability MC User Defined

To be used for Market Center specific needs




Long-Term Liabilities


2-8200/9999 Note Payable

All long-term note payables are listed separately on the Balance Sheet. They must be backed by a legal promissory note document.

Equity

3-1000 Common Stock

If the MC legal entity is a C-Corp and issues stock to shareholders, the money received for the stock is entered in this account.

3-1100/1499 Owner Dividends/Distributions

Used when the Market Center issues checks to the owners for their share of the Market Center profits or, except for a C-corporation, taxes.

3-1500/7999 Paid In Capital

The money invested by the owners in the business.

3-8000 Beginning Retained Earnings

The accumulated profit/loss through the prior year.

3-9000 Current Period Profit (Loss)

This account accounts for the net profit or loss from the Income Statement YTD activity.



KW Approved Budget Chart of Accounts

Income & Cost of Sales


Income Accounts:

4-0010 Listings Sold

4-0020 Sales Sold

4-0300 Leasing

4-0040 Referrals

Cost of Sales Accounts:

5-0010 Listing Commission

5-0020 Sales Commission

5-0030 Leasing Commission

5-0400 Referral Commission

5-0060 Clearing Commission

5-0070 Agent Royalty

5-0090 Concession to Close

5-2000 E&O Collected from Agents

All Income & Cost of Sales accounts are ruled by WinMORE. These accounts are populated when the WinMORE Deposit Slip is imported into MYOB or manually entered into RealBroker (for Canadian Market Centers).



KW Approved Budget Chart of Accounts (continued)

Operating Expense Categories

Market Center expense category types are:

1. Normal

Expenses incurred while conducting normal Market Center business activity.

2. Reimbursable

The Associate ultimately pays the expense (in advance whenever possible). These expense categories are "zero balance" accounts. In other words, the purchase and the amount billed to the Associate for these items nets to zero within the same month

3. Secondary

Optional expenses incurred by the Market Center and considered secondary to the profitable operation of a KELLER WILLIAMS Market Center. The Market Center will most likely encounter expenditures for these items over time as the Market Center becomes increasingly profitable. A most important secondary expense category is Federal Income Tax!

For items such as Board dues, Insurance, etc., use the actual cost. If an item is paid on some basis other than monthly (i.e.: quarterly, annual, etc.) translate the cost

into a monthly figure and enter that figure into the appropriate line on the form. For those items which are not fixed (i.e.: Market Center printing cost, etc.) make a best guess

estimate of what you think the amount should be and enter that amount. If you have no estimate, then leave that item blank.

Your Operating Expense Budget, unlike your Commission Income and Cost of Sales Budgets, are annualized and divided by 12 for a consistent monthly total for all months throughout the budget year. The KWFM report annual totals for "Operating Expenses," "Depreciation/Amortization," and "KELLER WILLIAMS Debt Allowance" added together and divided by 12 should equal your budgeted monthly operating expense total.

It is important that the balance at end of month for each expense category be pure MC expense!




Operating Expenses

Acct. # Account Heading/Definition Type

6-1000 Accounting/Tax Preparation Normal

An Annual expense for preparation of state and federal income taxes. Charges for KW Solutions support including recommended monthly/quarterly reviews of your WinMORE End of Month Reports and MYOB or RealBroker Financial Statements.

6-1510 Advertising-Classified Normal/Secondary

All newspaper classified (for sale) ads including media such as Homes Magazine.

6-1520 Advertising-Other/Marketing Normal/Secondary

KELLER WILLIAMS Realty balloons and other marketing materials. Market Center TL discretionary fund to be used for Associate recognition and the promotion of marketing oriented events. Also used for the monthly KWRI Marketing Fee.

6-1700 Auto Expense Normal

Reimbursement to Market Center administrative employees for personal car mileage usage while on company business. We recommend a $100 per month cap on this expense.

6-1800 Bad Debt Expense Normal

When an Associate AR invoice becomes uncollectible, the invoice is written off to this account. It is a good idea to send past due demand letters return-receipt-requested.

6-1900 Bank Charges Normal/Reimbursable

Monthly bank service charges and check or deposit slip printing charges. Note: Associates will reimburse the Market Center for any bank charges incurred if an Associate's check is returned for any reason.

6-2000 Computer Software Normal

Annual MYOB and other software update charges.

6-2100 Contests & Sales Awards Normal

Monthly and yearly sales contests and awards.

6-2300 Contract Labor/Consulting Normal

Computer hardware technical support services; temporary receptionist while employee on vacation.

6-2600 Contribution/Gifts Normal

Market Center TL's discretionary fund to use promoting goodwill with your customers, Associates, vendors or the community.

6-2800 Copy Machine/Copy Expense Normal/Reimbursable

Copies made by management. Associates are billed for their copies according to Market Center policy.




Operating Expenses (continued)


6-3010 Dues/Subscriptions Secondary

Local metropolitan criss-cross directory and other market area information publications (e.g. Builders Update, local newspaper delivery etc.).

6-3020 Dues/MLS Normal

Base cost for connecting the Market Center to Multiple Listing Service. Note: Associates are responsible for their own MLS dues.

6-3030 Dues/BOR Normal

Broker and/or Sales TL fees to join and remain current in the local board. Note: Associates must pay their BOR dues in advance as per local requirements.

6-3040 Dues/Other Normal

Other membership dues (e.g. local Chamber of Commerce).

6-4000 Depreciation/Amortization Normal

Method used must be approved by your CPA and your Regional Director. Note: If the furniture, equipment or start-up purchase was financed with a notes payable, the depreciation for these items is not considered an approved cost IF the KWR Debt Allowance (Acct. #8900000) is used to write off these assets. In other words, approved depreciation/amortization and KWR Debt Allowance costs can not include amounts for the same item in both cost categories. Added together, accumulated depreciation/amortization plus KWR Debt Allowance can not exceed Total Fixed Assets before depr. on your MYOB Balance Sheet.

6-4610 Insurance - E&O (Fees Only) Normal

Annual Market Center policy renewal fee that will not be recouped through E&O collected from Associates. Note: The Associate pays the E&O insurance for each sale or listing sold and it is considered a Cost of Sale category.

6-4620 Insurance - Life Reimbursable/Secondary

If Market Center TL participates in a retirement annuity program, this can be paid by the Market Center and/or deducted from the TL's paycheck.

It is strongly recommended the Market Center NOT pay for retirement annuities until the Market Center is profitable and the annuity is incorporated into the employees incentive/bonus plan.

6-4630 Insurance - Health Reimbursable/Secondary

Health insurance charge for an employee group plan can be deducted from the employee's paycheck.

It is strongly recommended the Market Center NOT pay for employee health insurance coverage until the Market Center is profitable and the insurance is incorporated into the employees incentive/bonus plan.






6-4640 Insurance - Office Normal

Covers all Market Center personal property (e.g. computers, desks, chairs, etc., any additional insurance required by a financing entity) and Commercial Comprehensive General Liability Insurance at the recommended levels approved by the Regional TL.

6-4670 Insurance - Other Secondary

Coverage for items required but not covered by the Insurance - Office category, e.g. Worker's Compensation.

6-4700 Interest Normal

Interest expense from monthly notes payable payments.

6-4750 KW Convention

All related expenses for all full-time office staff and OP attending the KW Convention. This does not include the owners costs for attending the Convention. Owner convention costs are booking below the line.

6-4800 Legal Expenses Normal/Secondary

E&O deductible claims and any necessary legal advice.

6-5010 Online services - Credit Reports Reimbursable

All credit reports are paid by the Associates therefore the Market Center will not have an expense in this category. If the Market Center plans to derive income from credit report fees, make sure the appropriate Other Income account is set up and budgeted.

6-5020 Online service - MLS Normal/Reimbursable

Base cost for the Market Center Multiple Listing Service. Note: Associates pay for their own MLS charges.

6-5030 Online services - Property Tax Normal/Reimbursable

Information Service

Base cost for Market Center on-line tax and information services that serve the local real estate board. Note: Associates pay for their own computer usage time service charges.

6-5040 Online services - Internet Normal/Reimbursable

Your Internet Service Provider, KELLER WILLIAMS Technology Fee, Internet software upgrades.

6-5500 Maintenance/Repair - Copy Machine Normal

The service agreement for the copier and/or direct repair expense.

6-5510 Maintenance/Repair - Phone System Normal

Includes minor telephone repairs and necessary refurbishing or service agreements.

6-5520 Maintenance/Repair - Computer Normal

Includes low-level formatting of your computer hard drives and other necessary repairs or maintenance of your computer equipment.






6-5530 Maintenance/Repair - Other Normal

Any routine repairs necessary to maintain the Market Center facility. NOTE: Major office upgrades are coded to the Fixed Asset account Leasehold Improvements.

6-5570 Meals Normal/Secondary

Market Center Manager's (TLs) discretionary fund used for business meals only.

6-5580 Meetings Secondary

Once a Market Center outgrows the ability to conduct Sales Meetings on premises, this account is used for renting a meeting facility. A cap of $100 per month is recommended.

6-5590 Printing - Out of House (OFFICE) Normal

Outside printing costs for forms, handouts, stationary, etc. which are distributed to Associates at no charge by the Market Center.

6-5910 Printing - Out of House (ASSOCIATE) Reimbursable

All printing items purchased by the Market Center to be sold to Associates. Special orders by the Associates (e.g. velox from Promotional Material Catalog and audio/video tapes) are paid in advance. Receipts from the Associates are coded back to this account.

6-6000 Postage/Freight/Delivery Normal

Market Center management general postage and recruiting flyers. Associates pay their own postage.

6-6010 Public Relations Secondary

All public relations costs once a Market Center is profitable and hires a PR firm or sponsors a PR event. The recommended cap is $250 per month.

6-6100 Recruiting Incentives Normal

All giveaways supplied to agents during the recruiting process. Includes business cards, signs, printed materials, etc. Your ALC must approve all above the line expenses coded to this account and a $100 a month cap is recommended.

6-6210 Rent - Office/Occupancy Normal/Secondary

Monthly cost for Market Center lease space and utilities.

6-6220 Rent - Other Secondary

Rental of space for special events and storage units.

6-6230 Rent - Equipment Normal

Monthly cost for renting office furniture and/or equipment (e.g. helium tank).

6-6510 Salaries - Administrative/Staff Normal

Monthly gross payroll amount paid to receptionist(s) and MCA. Please review federal regulations with your CPA regarding hourly versus salaried positions. Special federal rules are applied for salaried positions.






6-6520 Salaries/Admin/Bonus Secondary

Not initially budgeted. KELLER WILLIAMS Incentive Plan starts when the Market Center is profitable and has no loss carry forward.

6-6530 Salaries/Call Coordinator Normal

Monthly gross payroll amount paid to the Call Coordinator aka receptionist.

6-6540 Salaries - Team Leader Normal

Monthly gross payroll amount paid to Market Center TL.

6-6548 Salaries Assistant Team Leader Secondary

Monthly gross payroll amount paid to Market Center Assistant TL.

6-6550/6559 Salaries - Team Leader & Asst TL/Bonus Secondary

Not initially budgeted. KELLER WILLIAMS Incentive Plan starts when the Market Center is profitable and has no loss carry forward e.g. 17% of net profits each month after the ownership has made $8,000.

6-6560 Payroll Service Fees Normal

Fees paid to an outside company to process payroll. Also includes leased employees fees.

6-6610 Signs Reimbursable

All standard signs are stocked by the Market Center and sold to the Associates. Personalized or special signs are prepaid at the time they are ordered. Therefore the Market Center will not have an expense in this category.

6-7010 Supplies Normal

Basic office and computer supplies used by Market Center management bought in quantity to take advantage of discounts and savings. Note: Associates supply their own office supplies for personal use such as pads, pens, scissors, coffee, cups, etc.

6-8010 Taxes - Payroll Normal

The employer's portion of Market Center employees' social security and Medicare taxes. (As of 3/92, 7.65% of gross payroll paid to employees up to the IRS limits) Form 941 deposits are made monthly and Form 941 is filed quarterly. Review MYOB payroll tax setup with your CPA.

6-8020 Taxes - Payroll (FUTA) Normal

The employer' paid Form 940 Federal Unemployment tax. Form 940 tax deposits are made quarterly and Form 940 is file annually. Review MYOB payroll tax setup with your CPA.

6-8030 Taxes - Payroll (SUTA) Normal

The employer paid State Unemployment/Disability tax. The State tax report is usually paid and filed quarterly. Review MYOB payroll tax setup with your CPA.






6-8040 Taxes - Federal Income Secondary

Not initially budgeted. The owners Federal Income Tax expense is included in the operating budget when the Market Center becomes historically profitable (MYOB Balance Sheet Retained Earnings and Current Period Profit (Loss) nets to a profit). DO enter at least $1 as the budget so your Associates get used to seeing this as a line-item expense.

If your MC is a C-Corp, the JE to record taxes is a debit to this account and a credit to account #2-2200 Federal Income Tax Payable.

If your MC is not a C-Corp, the JE to record taxes is a debit to this account and a credit to account #9-8030 Reverse Taxes Federal Income (below the line).

6-8100 Taxes - Property Normal

Property taxes assessed by the county, municipal government, or local school district.

6-8140 Taxes - State Normal where applicable

State income tax expense.

6-9010 Telephone Service Normal

Telephone line charges plus taxes.

6-9020 Telephone Long Distance Normal

Long distance charges for legitimate business activities for Market Center Management, e.g. KWRI communications, support needs, recruiting, etc. Associates pay their own long distance. A $100 per month cap is recommended for this expense.

6-9030 Telephone Auto/Cell Secondary

Team Leader cell phone reimbursement once Market Center reaches a Regionally approved level of profitability.

6-9100 Training - Consultants/Materials Normal

Training programs and materials for your Associates.

6-9120 Travel/Lodging Normal

Reimbursement to Market Center employees for travel outside of the city for training, education, or recruiting.






6-9130 KWR Debt Allowance Normal

There are two acceptable methods for using this account: 1. Purchase of equipment for which depreciation will NOT also be booked above-the-

line. 2. The total of your monthly principle payments used to repay debt incurred by the

Market Center. There is a $2,000 per month cap on this account and accumulated depreciation plus any KW Debt Allowance used may never exceed your Total Fixed Assets before Depreciation on your Balance Sheet. KW Debt Allowance is used to increase monthly operating expenses by the APPROVED methods referred to above prior to calculating Associate profit sharing. The JE to record a KW Debt allowance entry is a debit to this account (above the line) and a credit to account #9-8040 Reverse KWR Debt Allowance (below the line).

6-9140 LCF Allocation Normal

Amortizing a LCF over a period of time with profit sharing occurring earlier than break-even as the result. If your MC plans to do this, your Regional Team Leader and KWRI must approve your plan first. The JE to record a LCF Allocation entry is a debit to this account (above the line) and a credit to account #9-8020 Reverse LCF Allocation (below the line).

6-9150 KW Cost Adj Years Normal

When the CPA EOY JEs are booked in the prior year MYOB data file and the final MYOB Financial Statement agrees with the IRS Income Tax report, the net change of the prior years YTD KW Owner Profit/Loss balance must be accounted for in the current transmittal month. This JE debits this account (above the line) and credits the offset account #9-8010 Reverse KW Cost Adj Prior Yrs (below the line).

6-9155 KW Cost Adj Prior 2003 Normal

Normally the YTD KW Owner Profit/Loss balance does not change once the month is transmitted as long as the month Lock Period in MYOB is not opened. From time to time changes are inadvertently made in transmitted months data in MYOB. When this occurs a duel-JE can be booked. The first JE is recorded in the transmitted month that was changed and the second JE reverses the entry in the current transmittal month. The result desired is to set the transmitted month YTD KW Owner Profit/Loss back to what was transmitted and move the net amount of the change into the current transmittal month. This JE debits (or credits) this account (above the line) and the offset account is #9-8015 Reverse KW Cost Adj Prior 2003.

6-9157 Co $ Paid to Other MCs Normal

Payment to other Market Centers for a portion of Co $ collected, typically for the 1st year after an Associate transfers between MCs in the same area/region.

6-9158 Salaries Operating Partner Normal

ALC, Region & CEO of KWRI must approve and cannot exceed more than $1,000 per month.

6-9159 Salaries Designated On Site Broker Normal (with limits)

Only permitted in states that require the designated broker to be on site in the Market Center. Currently only Arizona and some Canadian Provinces qualify.




Other Income


8-0001 Mortgage Revenue - JV Normal Received from the Core Services agreement.

8-0002 Mortgage Revenue MSA Normal Received from the Core Services agreement.

8-0003 Mortgage Revenue Desk Income Normal Received from the Core Services agreement.

8-0004 Mortgage Revenue Other Normal Received from the Core Services agreement.

8-0011 Title Company Revenue Normal Received from the Core Services agreement.

8-0016 Home Warranty Revenue Normal Received from the Core Services agreement.

8-0018 Other Income Escrow Co (S CA only) Normal for S. CA MCs Received from the Core Services agreement.

8-0019 Company $ Recd from other MCs Normal

Payments from other Market Centers for a portion of Co $ collected, typically for the 1st year after an Associate transfers between MCs in the same area/region.

8-0020 Other Income - Desk Fees Normal This is the total monthly amount your agents pay for the desk and office space in your Market Center.

8-0030 Other Income Copier BW Normal Agent payments for use of the office copier(s).

8-0040 Other Income Copier Color Normal Agent payments for use of the office copier(s).

8-0050 Agent Transfer Fees Normal The fee agents pay to be affiliated with the MC.

8-0060 Other Income Normal




8-0110/9999 MC User Defined Other Income Normal




Profit Share/Franch Royalty


9-0020 Profit Share Normal Money Paid into the KW Profit Share pool by the Market Center.

9-0030 Franchise Royalty Normal The royalty paid to KWRI by the Market Center.

9-0040 FR Paid by Agents Normal Royalty paid to the Market Center by Associates.

After PS Expense/Income

9-8010/15 Reverse KW Cost Adj Normal Used in conjunction with 6-9150 KW Cost Adj for prior year CPA Adjustments to the

prior year KW Owner Profit/Loss or with 6-9155 for prior current year adjustments.

9-8030 Reverse Taxes Federal Income Normal Used in conjunction with the 6-8040 Taxes - Federal Income account by any non-C-Corp MC to expense taxes above the line and reverse below the line.

9-8035 Reverse Taxes State Income Normal (with limits) Used in conjunction with the 6-8140 Taxes State account where applicable.

9-8040 Reverse KWR Debt Allowance Normal Used in conjunction with the 6-9130 KWR Debt Allowance account to write off Fixed

Asset purchases up to $2000. Used as an alternative to Depreciation expense.

9-8100/8110 Opening Cost - Miscellaneous Normal New MC expenses i.e. Grand Opening Party expenses.

9-8200/8290 Misc Owner Costs Normal Valid IRS business expenses for the OP and owners that are NOT allowed above the line, i.e. OP Salaries.

9-9000 Interest Income Normal Interest from Money Market Depository cash account.

9-9010 Associate Application Fees Normal The $25 new agent fee that each KW Associate pays when they join KW.

9-9030 Annual Associate Renewal Fees Normal The balance left when the MC charges all Associates the $25 Annual Renewal Fee and

pays KWRI $20 per Associate.



KW Balance Sheet and Approved Budget Chart of Accounts

Exceptions Unanticipated Operating Expenses

It is anticipated that, during the normal course of business, unexpected expenses will be incurred by the Market Center. These expenses will be legitimate, bona fide expenses. (For example, an event such as contract litigation where the Market Center is liable for its prorated share of the settlement or the E&O deductible.)

When this type of situation arises the following process will occur:

The Market Center pays the bill. Budget Variance Request form is submitted to the Regional

Director for approval.

If the cost is verified as a legitimate cost, the expense stands as an approved cost.

If the expense is not approved, it is booked below-the-line as an "unapproved" expense.

Note: The Budget Variance Request is on the MCA WebOffice.

Goal Setting Chapter 3


MCA SKILLS

Chapter 3: Goal Setting


[1] Review the Forecast Model and your Market Center goals.

[2] Enter and submit goals for recruiting, production, and finance.

[3] Edit submitted goals. [4] View changed goals.



Entering the Market Center Goals The Regional Director will assist the Market Center leadership team, (the OP, the Team Leader, and the MCA) in determining the goals for the year using the Forecast Model.

What is the Forecast Model? A tool designed to help you project your next years business.

How is the Forecast Model used? To enter key Market Center Goals in the KW Intranet System. These goals are tracked, and can be used as a measurement and

accountability tool for the Market Center.

Where is the Forecast Model found? On the KW Intranet. Click on the Resources tab, then on the left

hand side of the screen, click on Documents. Then, click on Software. Download all of the files on this page.

All Market Centers are required to submit their annual recruiting, production, and financial goals to their Regional Directors for review. After review and approval by the Regional Director, the MCA enters the Market Center goals into the KW Intranet site. Check with your Region for submission deadlines. KWRI announces a deadline for submission each year; however, many Regions require goal submission well in advance of this date.

Completing and Uploading Goals

For detailed instructions on completing the Forecast Model and uploading your goals, please review Forecasting and Goal Setting on the KW Intranet. (Log into the KW Intranet, click on the Resources tab, on the left hand side of the screen, click on Documents, then click on Software.).



Entering the Market Center Goals

Editing Submitted Goals

At midyear, you may adjust your goals as necessary after obtaining approval from your Regional Director.

Step 1

Log onto the KW Intranet.

Step 2

Click on the Goals tab.

Step 3

Edit your existing goals.

Step 4

Click on the Reasons button and enter a description of why you changed your goals.

Step 5

Click on Re-Submit Changed Goals. Your new goals and reasons for the changes will appear in a Regional goal tracking report.



Entering the Market Center Goals

Viewing Submitted Updates

Step 1

Click on Changes for a complete record of changes to your goals.

Note: When changes are made to the Market Center Goals on the KW Intranet, MYOB must be updated with the new budget numbers as well. See Task 14 of the Start-Up checklist for details.

Start Up Checklist Chapter 4


MCA SKILLS

Chapter 4: Start-Up Checklist


[1] Use WinMORE, MYOB and the Keller Williams Intranet to complete all tasks on the Start-Up Checklist. [2] Establish the foundation for your Market Center

to transmit financials for the first time and operate smoothly on an ongoing basis.



Overview The Start-Up Checklist

Using the Start-Up Checklist will ensure that your Market Center starts out right. Your first transmittal must occur within 90 days from the date your Market Centers franchise agreement was signed.

The Start-Up Checklist is your guide to setting up the systems and tools you will use on a daily basis to keep the Market Center operating smoothly and productively.



Overview

The Start-Up Checklist-Page 1

Task/Steps Application ; Completed

1. TEST YOUR INTRANET CONNECTION AND SOFTWARE/HARDWARE REQUIREMENTS Go to:

http://support.kw.com/pages/mc_mcatech.shtml Email [email protected], confirming you have

completed the requirements test.

Internet

2. VERIFY STARTING DATE/DEFER TRANSMITTAL

Confirm the Period month displayed is the initial transmittal month.

If it is not, contact your launch coordinator ([email protected]) immediately to have it changed.

Do NOT post DAs until it is corrected.

WinMORE

3. VERIFY DEFAULTS

Review and edit your Market Center defaults with your OP and/or TL.

WinMORE

4. ENTER WinMORE GOALS Refer to the instructions found on the KW

Intranet.

Intranet

5. VERIFY WinMORE SYSTEM AND DATA FILES

If an error message is displayed, contact [email protected] immediately.

WinMORE

6. VERIFY YOUR MARKET CENTER POLICIES FOR ASSOCIATE ROYALTY AND COMPANY $ SPLIT

WinMORE

7. REVIEW THE PROFIT SHARE ACCOUNTING GUIDELINES & KW CHART OF ACCOUNTS INFORMATION

KW Intranet

8. ENTER ASSOCIATES, LISTINGS, ETC. All agents, owners, and MC staff members are

entered into WinMORE Set up the Team & Group Award Entry

BEFORE entering any DAs. Do not post DAs until your WinMORE System

Date is set to your initial transmittal month

WinMORE



Overview

The Start-Up Checklist-Page 2

Task/Steps Application Completed 9. DOWNLOAD THE LATEST ALL ASSOCIATES FILE AND LOAD IT INTO THE WinMORE SYSTEM

WinMORE Internet

10. ENTER ALL COMMISSION DEPOSITS IN WINMORE Enter and post DAs for all previous months

commission deposits using the first day of the current WinMORE Transmittal month.

WinMORE

11. ORDER COMPUTER CHECKS Order multi-purpose laser checks

specifically designed for use with MYOB. Check out: http://www.agentcountry.com/agentstore/.

Internet

12. PRINT & REVIEW YOUR CHART OF ACCOUNTS Click Accounts Accounts List Print -

OK. Review the KW Standard Chart of Accounts and make any necessary account name changes for MC User Defined accounts in MYOB and in the KWfinancialstatement.xls file (see next step).

MYOB

13. VERIFY THAT THE KW ACCTHIST.XLT AND KWFINANCIALSTATEMENT.XLS FILES ARE INSTALLED AND WORKING PROPERLY

MYOB

14. ENTER YOUR MARKET CENTER BUDGET

Get the KW Forecast Model & Approved KW Expense Budget Worksheet from your Team Leader (as approved by your Regional Director)

NOTE: If your MC opened mid-year, enter budgets beginning in the month the MC opened for business

MYOB



Overview

The Start-Up Checklist-Page 3 Task/Steps Application Completed 15. SET UP THE MYOB PAYROLL CATEGORIES

With your MCs CPA, confirm your Payroll Categories (including all local/State payroll taxes) are set up appropriately in MYOB

Have your CPA review the paychecks for the first payroll to make sure the calculated PR check is correct.

MYOB

16. ENTER ALL OPERATING, MONEY MARKET, AND ESCROW CASH ACCOUNTS ACTIVITY

Checks can be cut through either Purchases or through Banking Spend Money. Similarly, money can be received either through Sales (if the payment is from an agent who was invoiced through MYOB Sales) or through Banking-Receive Money

MYOB

17. ENTER ALL OUT OF POCKET MARKET CENTER EXPENSES PAID BY YOUR OP BEFORE YOUR MC CASH ACCOUNTS WERE SETUP

Download the outofpoc.pdf form from the MCA WebOffice. Give this form to your OP to complete and attach all supporting documentation. Please refer to the KW PS Accounting Guidelines for more information on owner investment NP versus PIC requirements.

MYOB

18. SET UP RECURRING JOURNAL ENTRIES

If a KWR Debt Allowance amount is included with your budget, set up a recurring JE.

Other recurring JEs can be set up as needed. For example: depreciation and amortization.

MYOB



Task #1 Computer Requirements Test 1. TEST YOUR INTRANET CONNECTION AND SOFTWARE/HARDWARE REQUIREMENTS Go to:

http://support.kw.com/pages/mc_mcatech.shtml Email [email protected], confirming that your

systems meets the technical requirements.

Internet

It is important to test your computer for the correct software/hardware.

Step 1

Launch an Internet connection and go to: http://support.kw.com/pages/mc_mcatech.shtml.

Step 2

To order the official MCA Dell computer click on the Dell logo.

Note: If you have an existing computer, print this page to review the requirements for your computer.

Step 3

After confirming your computer meets the technical requirements, email [email protected] stating you have met these requirements.



Task #2 Verify starting date in WinMORE/Defer Transmittal

2. VERIFY STARTING DATE/DEFER TRANSMITTAL

Confirm the Period month displayed is the initial transmittal month.

If it is not, contact your launch coordinator ([email protected]) immediately to have it changed.

Do NOT post DAs until it is corrected.

WinMORE

When you receive your copy of WinMORE, the start date is already defaulted to the current month. If this does not reflect the date of your first transmittal month, every entry you make into the program will not be dated correctly, thus creating incorrect financial statements.

Step 1

Click WinMORE on your desktop.

Step 2

Note the Period month displayed on the first screen.

If this does not reflect the month of your first transmittal, DO NOT post any DAs. Contact [email protected] immediately to correct the Period month. DO NOT post any DAs until this has been corrected.



Task #3 Verify defaults in WinMORE

3. VERIFY DEFAULTS

Review and edit your Market Center defaults with your OP and/or TL.

WinMORE

Your Market Center has financial standards, some of which are legally required through the Franchise Agreement and all of which impact your owners profitability and your agents opportunity to profit share, among other significant effects. You must ensure that these defaults are correct for your Market Center.

Step 1

In WinMORE, click Set Up- System Defaults.

Step 2

Click Read.



Task #3- Verify defaults in WinMORE

Step 3

On your keyboard, press Alt+PrtScrn to print exactly what you see on your screen.

Review this list with your OP and/or TL. For each field that is not correct, double click the field name in the System Defaults and Controls Window.

Step 4

Enter a new Value and click Save.

Note: You will repeat steps 2-4 for each value that needs to be updated.



Task #4 Enter your Market Center Goals on the KW Intranet

4. ENTER WINMORE GOALS Refer to the instructions found on the KW

Intranet.

Intranet

The KW Intranet has a complete set of reports by which you, your TL and your OP can view your current performance against your goals. The current performance numbers come from the data you submit to KWRI during your end-of-month transmittal, and the goals come from the data you enter on the KW intranet during this step.



Task #5 Verify WinMORE System and Data Files

5. VERIFY WINMORE SYSTEM AND DATA FILES

If an error message is displayed, contact [email protected] immediately.

WinMORE

As part of your Start-Up Checklist, as well as every day, you will verify your system and data files.

Step 1

In WinMORE, Click Setup and select Verify System and Data Files.

Step 2

A message dialog box will appear informing you of the folders to be tested. Click OK.



Step 3

A message dialog box should appear informing you that The WinMORE System and Data Files are OK. Click OK. If you see any other message, contact [email protected] immediately.



Task #6 Verify your Market Center policies for Associate Royalty and Company Dollar Split

6. VERIFY YOUR MARKET CENTER POLICIES FOR ASSOCIATE ROYALTY AND COMPANY $ SPLIT Review Section 1 SPECIAL NOTE ON

MARRIED COUPLES SHARING ONE CAP

WinMORE

Interview your OP and/or TL with the following questions. Record their responses below:

Question Answer

What percentage of the first $50,000 anniversary GCI per licensed Associate 6% Franchise Royalty is paid by our Associates?

What is the Company Dollar (CO$) split?

Married couples may split one royalty cap. What is our Market Center policy for their Company Dollar (CO$) Split?



Task #7 Review the Profit Share Accounting Guidelines and KW Chart of Accounts

Review the Profit Share Accounting Guidelines and KW Chart of Accounts Information. These documents are the guide for accounting in your Market Center.

The Profit Share Accounting Policies and Guidelines can be found on the KW Intranet in the Policies & Guidelines Manual. Click on the Resources tab, then on the left hand side of the screen, click on Documents, and then click on Manuals. Download the Policies & Guidelines manual. The Profit Share Accounting Policies and Guidelines are in Addendum A.

The KW Chart of Accounts can be found on the MCA WebOffice.

If you have any questions regarding the Profit Share Accounting Guidelines or the KW Chart of Accounts, please contact [email protected].

7. REVIEW THE PROFIT SHARE ACCOUNTING GUIDELINES & KW CHART OF ACCOUNTS INFORMATION

Intranet



Task # 8 Enter Associates, Team and Group Awards, Listings and Pending DAs

8. ENTER ASSOCIATES, LISTINGS, ETC. All agents, owners, and MC staff members are

entered into WinMORE Set up the Team & Group Award Entry

BEFORE entering any DAs. Do not post DAs until your WinMORE System

Date is set to your initial transmittal month

WinMORE

Update WinMORE to reflect your Market Centers current operational and financial status.

Enter Associates, Listings, and Pending DAs while waiting to defer transmittal, but DO NOT post DAs until your WinMORE system date is set to your first transmittal date.

After entering Associates, your Associates will receive an e-mail (and you will receive a carbon copy) with their KW Intranet login information.

You may also add non-licensed KW staff (such as the OP, MCA or Call Coordinator).

Note: See MCA Skills-Daily Checklist and Weekly Checklist for detailed instructions on WinMORE entry.



Task #9 Download latest All Associates file and load into WinMORE

9. DOWNLOAD THE LATEST ALL ASSOCIATES FILE FROM THE KW FTP SITE AND LOAD IT INTO THE WinMORE SYSTEM.

WinMORE Internet

At the start up of your Market Center and on the 21st of every month, you will download the latest All Associates file from KWRI. It is important that you load the All Associates file into WinMORE after downloading it.

When you load the All Associates into WinMORE, you will be making the following changes in your MC data.

Update the WinMORE program with enhancements. Update the KW Profit Share Tree to include a complete list of

potential Sponsors that were transmitted in the previous month from all MCs internationally.

Update the Status and other important information in your Associate records as detailed on the Associate Transfers and Sponsor Changes completed by KWRI the prior month.

Update your Associate records with the Profit Share amounts paid to your Associates for the prior transmitted month.

Note: It is important that you do a backup of WinMORE before you download the All Associates report.



Task #9- Download latest All Associates file and load into WinMORE

Step 1

In WinMORE, click Month-End and Download All Associates and Statements.

Step 2

After the All Associates file has been downloaded, in WinMORE click Month-End and Load All Associates.



Task #10 Enter All DAs for Previous Months Commission Deposit in WinMORE

Once WinMORE reflects the correct transmittal day, enter all of the DAs from the previous months. Be sure to use the first day of the transmittal month.

Note: For more information on entering DAs see MCA Skills-Daily Checklist.

10. ENTER ALL COMMISSION DEPOSITS IN WINMORE Enter and post DAs for all previous months

commission deposits using the first day of the current WinMORE Transmittal month.

WinMORE



Task #11 Order Computer Checks

11. ORDER COMPUTER CHECKS Order multi-purpose laser checks

specifically designed for use with MYOB. Check out: http://www.agentcountry.com/agentstore/.

Internet

You can order multi-purpose laser checks that are compatible with your check printing default set up in MYOB.

Check out: http://www.agentcountry.com/agentstore/.



Task #12 Print and Review your Chart of Accounts

12. PRINT & REVIEW YOUR CHART OF ACCOUNTS Review the KW Standard Chart of

Accounts and make any necessary account name changes for MC User Defined accounts in MYOB and in the KWfinancialstatement.xls file (see next step).

MYOB

It is important that you familiarize yourself with your Market Centers chart of accounts. Keller Williams Realty, Intl requires that each Market Center use a standard chart of accounts, which is defaulted in your copy of MYOB during software installation.

Market Centers are able to customize certain user defined accounts in MYOB.

Step 1

Click MYOB on your desktop.

Step 2

Click Open.



Task #12- Print and Review your Chart of Accounts

Step 3

Double Click your data file name.

Step 4

Enter your User ID. Click OK.

NOTE: A password is not required, but you are advised to have one if your computer is not kept in a locked office.




Step 5

Click Accounts and Account List.

Step 6

Click Print.




Step 7

Select the printer and click Print.

Step 8

Review the KW Standard Chart of Accounts and make any necessary name changes for Market Center User Defined Accounts.



Task #13 Verify KW .XLT Documents

14. VERIFY THAT THE KW ACCTHIST.XLT AND KWFINANCIALSTATEMENT.XLS FILES ARE INSTALLED AND WORKING PROPERLY

MYOB

During transmittal, information from MYOB and WinMORE is uploaded to KWRI. You will need to have the KW Accthist.xlt and KWFinancialStatement.xls.

Step 1

In MYOB, click Reports and select the Accounts Tab. Select Account History (OfficeLink). Click Customize, click the Finishing Tab, and check Include $0.00 balances. Click Send To Excel.



Task #13 - Verify KW .XLT Documents

Step 2

Wait for the excel spreadsheet to fully load. If you do not, you may see Excel COLEException error messages or incomplete financial information on the KW Financial Statements. Once the spreadsheet has fully loaded, confirm there is a Prepare KW Financial Statement button.

Note: If you do not have Prepare KW Financial Statement you will need to obtain the KW ACCTHIST.XLT.



Task #13 - Verify KW .XLT Documents

To obtain the KW ACCTHIST.XLT file:

Step 1

Log on to the MCA WebOffice.

Step 2

Click on Documents, then MCA Exchange. Click on the appropriate Financial Statement folder. Download the AcctHist file, the KWFinancialStatement.xls, the Chart of Accounts PDF and the installation instructions.

Step 3

Follow the installation instructions from the MCA WebOffice. If you have any questions about installation, contact [email protected].



Task #14 Enter your Market Center Budget

14. ENTER YOUR MARKET CENTER BUDGET

Get the KW Forecast Model & Approved KW Expense Budget Worksheet from your Team Leader (as approved by your Regional Director)

NOTE: If your MC opened mid-year, enter budgets beginning in the month the MC opened for business

MYOB

Adding your budget to MYOB allows you and the rest of your Market Center leadership team to view the budgeted vs. actual financial figures. It is critical to ongoing accountability to have this insight into your Market Centers financial operations.

Dont forget to enter your budget beginning in the month that your Market Center opened for business.



Task #14- Enter your Market Center Budget

Step 1

Ask your Team Leader or Operating Partner for your Market Centers KW Forecast Model and Approved KW Expense Budget Worksheet (as approved by your Regional Director).

Step 2

Click Accounts and Account List.



Task #14- Enter your Market Center Budget

Step 3

Click on Budgets.

Step 4

Enter the appropriate figures in the Budget columns. Click OK.

Note: You can click on the Copy Amount to Following Months button to quickly copy a value to all of the following months.



Task #15 Set Up the MYOB Payroll Categories

15. SET UP THE MYOB PAYROLL CATEGORIES

With your MCs CPA, confirm your Payroll Categories (including all local/State payroll taxes) are set up appropriately in MYOB

Have your CPA review the paychecks for the first payroll to make sure the calculated amount is correct.

MYOB

Note: This step only occurs if you are maintaining payroll in-house.

With your Market Centers CPA, review the payroll categories in MYOB. Be sure to set up any local or state payroll taxes. Review the first payroll checks with the CPA to ensure that the calculated amount is correct.

For more information about using MYOB for Payroll, see MCA Skills-Monthly Checklist.



Task #16 Enter All Operating, Money Market, and Escrow Cash Accounts and Activity into MYOB 16. ENTER ALL OPERATING, MONEY MARKET, AND ESCROW CASH ACCOUNTS ACTIVITY

Checks can be cut through either Purchases or through Banking Spend Money. Similarly, money can be received either through Sales (if the payment is from an agent who was invoiced through MYOB Sales) or through Banking-Receive Money

MYOB

Whether you are new to a new Market Center or new to an existing Market Center, you will probably have some financial records that were kept manually and need to be entered into MYOB. If you dont enter them into MYOB, your financial statements will be incorrect.



Task #16- Enter All Operating, Money Market, and Escrow Cash Accounts Activity into MYOB

Setting up Card Files in MYOB

MYOB has a card file (electronic index card system) for Customers, Vendors, Employees and Personal items. This is where details of all contacts can be entered. When entering an AR or AP invoice, contacts can be entered or edited on the fly.

Step 1

Click Card File and Card List.

Step 2

Click on a record to edit the existing information, or click New to create a new card.




Step 3

Select the card type and designation. Enter a name, address and phone numbers. Once all the fields are complete, if you are entering an Associate (Customer), click Selling Details.

Step 4

Under Customer Terms Information, enter Payment is Due In a given number of days, Discount Days 0, and Balance Due Days is 10. Click OK to save.




Manual Checks

Step 1

To enter checks that have been cut manually, in MYOB, click Banking and Spend Money.




Step 2

Enter the information for all the checks issued from this cash account to the present. Be sure to check Already Printed. Use the actual date of the transaction, even if it is prior to your initial transmittal month. Once complete, click Record.

Enter information here.




Payroll For information about Payroll, see MCA Skills - Monthly Checklist.

Step 1

To enter paychecks, in MYOB click Payroll and Process Payroll.

Step 2

Complete the Process Payroll wizard.




Deposit Receipts

Step 1

To enter receipts deposited for this cash account, in MYOB click Banking Receive Money.

Step 2

Enter the information for all receipts (except commission deposits) deposited for this cash account to the present. Use the actual date of the transaction, even if it is prior to your initial transmittal month. Once complete, click Record.

Note:

Be sure to tab through all of the fields until total allocated matches total received.

Note:

Be sure to click on the correct cash account.

The system defaults to the operating account.



Task #17 Enter all Out-of-Pocket Market Center Expenses

17. ENTER ALL OUT OF POCKET MARKET CENTER EXPENSES PAID BY YOUR OP BEFORE YOUR MC CASH ACCOUNTS WERE SETUP

Download the outofpoc.pdf form from the MCA WebOffice. Give this form to your OP to complete and attach all supporting documentation. Please refer to the KW PS Accounting Guidelines for more information on owner investment NP versus PIC requirements..

MYOB

Your OP has expenses that were paid before the Market Centers cash accounts were set up. You have three options for documenting these out-of-pocket expenses.

1. Your MC can reimburse the OP in one year, 2. Your MC can pay back the OP over a period of years, 3. You can book the expenses as Paid in Capital, which

will affect shareholder dividends.

In the MCA WebOffice, click on Documents, and then on International Documents. Download the Out of Pocket document. Print it and give it to your OP to complete and attach all supporting documentation.



Task #17 - Enter all Out-of-Pocket Market Center Expenses

MC reimburses the OP within one year

Step 1

In MYOB, click Purchases and Enter Purchases.

Step 2

Complete the New Service Dialogue box.




MC reimburses the OP over a period of years

Your OP will need to draw up a note with terms of payment.

Step 1

In MYOB, click Accounts and Record Journal Entry.

Step 2

Record this transaction.




Paid in Capital

Step 1

Record a debit in expenses and a credit in Paid in Capital.



Task #18 Set Up Recurring Journal Entries

19. SET UP RECURRING JOURNAL ENTRIES If a KWR Debt Allowance amount is

included with your budget, set up a recurring JE.

Other recurring JEs can be set up as needed. For example: depreciation and amortization.

MYOB

Each month you will enter data for the same income or expenses (such as utility bills). Rather than duplicate your entire effort month after month, you can set up recurring entries in MYOB to save time and keystrokes for those recurring items.



Notes

Online Course Evaluation- Please fax to KWU at 512-328-1433 Your feedback is important to us! Thank you! Class ________ Date Instructor ___ Instruction 1. Please rate the overall effectiveness of the instructor. 5 Excellent 4 Very good 3 Okay 2 Not so hot 1 Poor NA Doesnt apply Enter your rating number under the items. 5 Excellent 4 Very good 3 Okay 2 Not so hot 1 Poor NA Doesnt apply 2. About the

instructor: Knowledge of the topic Enthusiasm Ability to explain

material Respect for students

3. About the class: Pacing Opportunity for questions Coverage of course

materials

4. About the Materials: Accurate and up to date Content is clear and easy to understand

5. If you could give the instructor one suggestion so they could help you learn more effectively, what would it be? 6. How could we improve the content of this course? The Training Experience 7. How would you describe your overall online experience? 5 Excellent 4 Very Good 3 Okay 2 Not so hot 1 Poor Why do you say that? 8. How was the class different from what you expected? 9. Would you recommend this course to others who need to know about this topic? Why do you say that? 10. Would you take another class with the instructor? Why do you say that?

Circle the

answer

Circle the

answer

Mca Skills Section II- Keller Accounting Ed. 1rev

Documents

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