Note that frequently invoice to customer is produced by order processing or invoicing system and the data is passed (summary invoice information) to the A/R system - A/R system produces statements.
Input to A/R:
summary invoice information
payments
adjustments - credits (returns or adjustments etc.), debits (over bill or reverse bad check etc.) - frequently different transaction code for each reason for debit or credit
Files used by A/R:
A/R Consolidated Master (records to increase or decrease amount owed) - record for each of input types
Customer Master - N/A information, credit limit, terms, cycle billing information (if used), current balance due (might be aged out)
Invoice transaction file - new invoice summary information from order processing system (keyed in if don’t have one)
Cash receipts transaction file - checks/payment
Adjustment transaction file
Change file on A/R consolidate and customer masters - audit trail
Deleted invoice file - A/R history file
General ledger interface file (If have general ledger)
Reports:
Cash receipts register
Invoice register
A/R Master change files register
Customer change file register
Reports with various screening criteria - collection information etc
Deleted invoice report
Processing Notes:
Decisions about whether 0 balance invoices will appear on statement (0 balance invoice is where invoice has been paid off) - to show must print statements prior to delete processing
Select carefully where random processing and sequential processing is appropriate
Age processing - in balance forward system delete current after statements and bump buckets - open invoices system get rid of 0 balance invoice (don’t carry aging on A/R consolidated file - figure out as needed by invoice date)
Things to watch out for:
keep track of overdue
in some businesses need to interface with order system
credit limits
identify late
post cash
make sure supports you accounting system - open item, balance forward (only shows item for current period)
how is cash applied - to oldest or current
how do you apply to open item - specific or oldest etc.
how do you handle partial payments (pay special attention if specific application)