The accounts receivable subsystem (A/R) maintains records on customers and customer invoicing and payments. It is designed to provide summary data to the FACCTS general ledger system and to accept billing information from one of several optional billing susbsystems. All detailed backup of the accounts receivable control account in general ledger comes from the A/R subsystem, along with customer histories, aged trial balance, etc.
Customer RecordsThe focal point of the A/R subsystem is the customer file; this contains standard information about each customer, such as name and address. This file also maintains the highest amount ever owed by the customer and the date on which this occurred. A salesman may be associated with each customer, and the customer file also carries the total business year-to-date and total business.
To view Customer Records:Customers are references by a 6-character code referred to as the "customer number" by the system; since letters are allowed as well as numbers, we suggest a coding scheme based on the customer name rather than a sequential numbering scheme.
To Add a Customer:You may also use the TARGET BACK OFFICE MENU, choice #51 ADD PROSPECT TO A/R to enter a prospect already in the system into the Accounts Receivable system. Just fill in the appropriate fields.
Customer information may be printed in proofreading form or on Rolodex™ cards as desired. The address information stored here is available to the billing subsystems for automatic addressing of invoices.
To Print a Customer Listing:Invoice Records are normally done by the Billing System, each customer invoice is maintained in the A/R database in detail; each line item of the invoice carries the description, dollar amount, and general ledger account number for revenue distribution. The dollar amount in any given line can be a plus indicating a debit to the customer account or a minus indicating a credit to the customer account.
Also associated with each invoice is a "header" which carries the invoice date, total amount, balance, and a general description. Each invoice may also carry an indication of the responsible salesman, who may differ from the salesman assigned to the customer.
Invoice entry may be via the A/R subsystem function or may be accomplished by one of the optional billing subsystems available with FACCTS. The operation of the A/R subsystem is the same no matter what the source of a given invoice record.
Credit RecordsIn FACCTS, credits are identical to invoices except for the sign of the total amount; a credit invoice might actually contain debit line items: the mixing of these types is completely general. The numbering scheme for credits is up to the user; we suggest that a unified numbering scheme for invoices and credits be adopted as a control, but a dual numbering system is acceptable as long as the same number is not used more than once.
Payment RecordsPayments are also stored in detail in FACCTS; associated with each customer check is a "header" with such information as the check number, date and total amount. For each invoice against which the check is used as a payment ("applied") there is a detail record which carries the invoice number and amount applied to this invoice. This information is used to produce the customer history and also to deal with returned (NSF) checks.
Application of PaymentsThe normal procedure for entering a customer payment includes specifying the application of the payment to invoices. In some cases this may not be convenient or possible; in these cases, the check may be left unapplied either in whole or in part when it is entered. There is a separate procedure to be used to apply a payment left unapplied when entered; cash should not be left unapplied longer than necessary.
To aid in isolating and applying unapplied cash, FACCTS provides a report showing all unapplied cash in the database. This report should be run periodically, and cash applied as possible. Unapplied cash also shows on the aged trial balance report.
Posting to General LedgerThe data stored in the A/R subsystem database is independent of data stored in the general ledger system. The connection between the subsystems is the posting process in accounts receivable which summarizes all changes in A/R position to G/L. Invoices are posted to the ledger based on the transaction date specified when the invoice was booked; for each unique transaction date with data to be posted, a ledger entry is constructed with one line item for each revenue account and one for the A/R control account. The report produced by this process should be filed with the other journal entry aprons as part of the audit trail.
Cash receipts are posted to general ledger based on the date specified by the user at the time the posting is run; this date is used so that the G/L date can match the actual deposit date as an aid to reconciliation. This implies that the posting should be run at least every time a deposit is made, if not every day.
Sales JournalThe sales journal (called "invoice register" in some systems) lists all invoices issued during the selected period. This provides a cross reference to filing systems which file invoices by customers, and also gives sales activity for the selected period. If desired, a sales journal may be requested for a single salesman.
In conjunction with the cash journal, the sales journal can be used as an audit check on the change in position in the A/R control account balance.
Cash JournalThe cash journal shows all cash receipts during the selected period. This is used as a control on the bank deposits during the period.
Aged Trial BalanceThe aged trial balance details all open receivables invoices by customer. It serves as a backup to the balance in the A/R control account in the ledger and also as a collection tool. The totals for each aging category may be helpful in planning cash flow.
Invoice ApronsInvoices booked via the A/R subsystem will not have any system-generated backup similar to that produced by the billing subsystems. For this reason, A/R can produce an entry apron after the fact to be used as the backup document, showing the amounts, descriptions, and revenue distribution. These should be filed with the invoice copies.
Income JournalThe income journal shows the details of all entries to the revenue accounts in general ledger coming from A/R. The detail consists of the actual line items from the invoices hitting each revenue account, along with customer and invoice identity.
Customer HistoryThe customer history shows all transactions against the customer account. The transactions are shown in invoice sequence, with any payment against the invoice shown with it. It is important to note that if a check was received in payment of several invoices, the check will be shown in pieces corresponding to the amounts paid on the various invoices.
Unapplied Cash ReportThe unapplied cash report gives a listing of all unapplied cash being held in the A/R subsystem. Since unapplied cash may distort the view of a customer payment history, statements, etc it is important to run this report periodically and apply cash as soon as possible.
Customer StatementsThe customer statements produced by the system are in a form suitable for mailing in window envelopes if printed on letterhead; the statement shows each open invoice, with date, invoice number, description, and amount due. Invoices against which partial payments have been made will be shown net of the payment. Note that unapplied cash may distort the statement of account, so it is important to run the unapplied cash report before producing statements.
If statements are to be printed on blank paper, the appropriate heading information may be specified in CONTROL MAINTENANCE.
To Print Customer Statements: