Cash Summary

Adjustment processed are bank transactions that affect your bank balance but are not reqular deposits or checks. For example, these include bank charges, interest charges, etc.

Undefined transactions are those transactions that cleared the bank but that were not originated and processed through AlChavo. Since these transactions were originated directly by you, your bank or your personnel, we generally require additional information to properly account for it. You may easily provide this information through our specially designed screens in our Cash Summary Module.

The Cash Summary module is only available if all additional modules are purchased and requires that we have electronic access to the information from an affiliated bank. Your daily reconciliation will be processed and transmitted only if information has been updated by the Bank and received by OSI before 10:00 a.m. Once your reconciliation is ready and posted in the Web site, we will notify you by e-mail.

Current Affiliated Banks:

• Banco Popular de Puerto Rico
• Banco Santander Puerto Rico
• FirstBank

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All payments will be assigned to an expense account, except capital assets (cars, computers, etc.) with a cost basis of $1,000 or more, and transfers of cash and cash equivalent accounts (e.g. deposits to money market accounts, bank transfers, etc.).

Current charges of Credit Card statements are posted as a total and it’s therefore considered as only one transaction. They are recognized in the financial statements in a separate expense-type account (e.g. Miscellaneous Expenses – VISA) and they are not segregated into each specific expense account (e.g. Car Expenses, Gas, etc.).

Withholdings made for Professional Services payments will be posted as an Open Invoice within 2 working days of the months end.

Year-end reports, e.g. 480.6A and 480.6B, are charged separately at $2.50 per Payee. Other standard or special reports will be subject to our regular Standard Value Rates.

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Payroll

$50 fee per payroll processed up to 20 employees (direct deposit or check), $2.50 per each additional employee.

Presently, our services are limited to our clients within the Commonwealth of Puerto Rico’s jurisdiction.

Included within the $50 fee are the following regulatory reports:

1. PR Income Tax - Quarterly
2. IRS Social Security Reports - Quarterly
3. Disability and Unemployment - Quarterly
4. Chauffeurs Insurance Report - Quarterly
5. Federal Unemployment Tax Report – Quarterly or Annually, as applicable
6. State Insurance Fund (Fondo Seguro del Estado) – Annual Policy Estimate Form

Regulatory payments e.g. FICA and Income Tax withheld, will be prepared and posted as an Open Invoice with each payroll processed.

Each payroll Frequency (e.g. biweekly, weekly, etc.) is considered a different payroll processed.

Payroll processing requires that you use our Web site to: 1) enter the number of hours worked by each employee; 2) enter new employees (or send a print out fill-in page with all the required information; and 3) enter the termination date of employees that should no longer be paid.

The $50 fee assumes one "round of changes". For example, once the payroll has been processed, we will notify you by posting a payroll edit register for you to review and/or download from our Web site. Any changes required must be clearly stated in writing and sent to us, usually by facsimile, using the payroll edit register. Once these changes, if any, are incorporated, we will post the revised payroll edit register for final approval and authorization of payment. If an additional "round of changes" must be completed, or you request a last minute change, it will be subject to our Standard Value Rates.

Direct Deposits can be transmitted every NACHA working day and are subject to all restrictions and regulations imposed by your bank (e.g. payroll must be transmitted three days in advance, etc.). Payroll checks will be mailed or delivered on pre-established weekly routes.

W-2’s are charged separately at $2.50 per employee. All other reports or work performed by us on your behalf will be subject to our Standard Value Rates.

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$50 monthly fee for up to 20 invoices posted, 20 deposits made and 20 follow up calls or facsimiles sent. A $2.50 fee will be charged for each additional invoice, deposit, follow-up call or follow-up fax. You have unlimited follow-ups sent by e-mail.

The scope of our services under the above price structure includes segregating the invoices per Customer, scanning the image of each invoice, maintaining and presenting a Customer Information and History over the Web, assigning each invoice total to the proper revenue account and following-up on uncollected invoices, as requested.

Follow up calls are limited to two (2) attempts in a one-hour interval. Any follow-up proceedings require that we have the invoice image. Questions that your Customers may have will be directed to your Module Administrator.

You are responsible for: 1) receiving and making deposits from your clients; 2) recording a detail of each deposit made through our Web application; and 3) preparing invoices and sending us a copy for processing.

Preparing your invoice is a very sensitive matter. We strongly believe that the most critical accounting function of running a business is its revenue or billing cycle. In the typical business, only you or someone internal to your organization can efficiently process and prepare your invoices. This person should know the day-to-day management of your business, e.g. special discounts given, terms of each contract or agreement, work done on a given patient, special arrangements agreed during last week’s lunch, etc. All these issues affect your revenue and therefore your invoices. You certainly don’t want errors or misunderstandings in your invoices that may affect your relationship with your Customers or delay collection. Please note, that we can prepare and mail invoices, keep track of inventories and segregate each item within each invoice, upon request. However these services are subject to our Standard Value Rates and are not within the scope of the services we provide through AlChavo.

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The provision of this service requires that all other modules be purchased. The monthly fee assumes one hour to prepare all financial reports, which for most clients is sufficient. The quarterly fee assumes two hours to prepare the financial reports, which in most clients is also sufficient. Any comments or suggestions should be received in writing within ten (10) working days from posting the financial statements on AlChavo. If additional hours are expended, including work done to incorporate your suggestions or review changes, they will be billed at Standard Value Rates.

Basic Financial Statements include:

1. Balance Sheet
2. Income Statement
3. General Ledger

Depreciation adjustments and proper segregation between principal and interest portion on fixed payment loans are adjusted on a Quarterly Basis only.

Additional Special Report, are billed based on the time spent generating them and vary depending on the level of experience required. The minimum charge for each special report requested is one hour.

The financial reports that we prepare follow to the extents possible Generally Accepted Accounting Principles and are solely prepared from the information provided by you. However, these are for your internal use only and may require additional adjustments if subject to an independent or external examination. Our scope of services does not include the issuance of an opinion of any type, e.g. a CPA audit, review or compilation.

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All inquiries and requests should be directed in writing to our Customer Service department through the Customer Service module. An estimate of the time and level of experience suggested will be submitted for your approval before starting any work.

Any work requested by you in writing, and that we agree to provide, as part of an audit, review, compilation, legal action, inquiry and reconciliation with Payee or Customer records, payroll matters addressed with authorities, preparation of invoices, inventory reconciliation, special forms, additional reports, reporting packages, tax returns and authorities or any other work not covered within the scope of the work, as defined in each module above, will be subject to our Standard Value Rates.

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Payment Terms

We will send you an electronic bill of your monthly balance due to OSI via e-mail, fax or mail on the 5^th day. The bill will cover the prior months’ services rendered for your review. You have 15 natural days from the date of the invoice to comment, if necessary. If no comments are received in writing during said period, we will automatically proceed to collect the balance due directly through ACH from your designated account. If any portion of the bill is questioned, we will collect the unquestioned portion on the date specified above.

To cancel our service you must notify us in writing. All cancellations will be effective on the next working month. Time and/or work spent on transition, if any, will be subject to a special Cancellation Rate.

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Organizing company records and getting them ready for our system fluctuates significantly between each new client. Accordingly, each transition is carefully coordinated to ensure an efficient and effective process and assumes a complete involvement on both parties.

As part of the transition we will meet with you, or your personnel, to prepare an informative package that will be used to properly setup your company in our system. The initial interview and gathering of the informative package plus setting up your company usually takes around six (6) to eight (8) hours. In addition, we will also offer a two (2) hour orientation on how to use our Web site to add all the relevant data (e.g. set up Employees, Payees, Customers, etc.) to complete the set up process. Furthermore, while you are completing the process of setting up the information we will offer two (2) additional support hours to answer any questions that you might have, e.g. Which Payees are subject to retention? or What is the correct withholding status of a particular Employee? This service represents ten (10) FREE hours of our part that we are glad to consider as a long and lasting investment in our business relationship.

Our set up procedures do not include the review or recreation of past records and transactions. We like our clients to start our services with a "fresh" start.

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In order for our service to be reliable, accurate and effective, we need to carefully schedule, organize and plan our working days and weeks in advance. We will work hard to fulfill all your needs in the least amount of time. We are committed to processing your instructions within two (2) working days of receiving your instructions or information. Any instructions or information received after working hours, will be considered as received on the next working day. Any work requested to be completed before our planned time, and which we agree to provide, will be automatically subject to a Rush Surcharge. For example, if you send your payroll information only one day before your requested Pay Day, it will be subject to the Rush Surcharge.

Working days include Monday through Friday from 8:00 a.m. to 5:00 p.m. except local Holidays (same as Government Holidays) and Federal Holidays (as defined by NACHA regulations).

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Free Delivery

We are prepared to offer all our services totally on-line and therefore we may service all of Puerto Rico from our headquarters without the need of any deliveries and no additional charges. However, in the Metro area we will pick-up and deliver packages directly at your premises, once a week, completely free. The Metro area is defined as San Juan, Guaynabo, Caguas, Bayamon and Carolina. Additional deliveries or, other than Metro area deliveries, will be based on third-party standard fees, which vary depending on distance, time and availability.

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An indexed CD ROM with the scanned images of your invoices, bills and Payee waivers, if any, will be offered to you at year-end. CDs are sold for $50, each.

Any bank charges, mailing costs and other incidentals, e.g. encrypted signatures, parking, etc., incurred by AlChavo in connection with the provision of the above services will be passed to you for a full reimbursement.

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