ARMENU Accounts Receivable Package Overview
Package Overview
How to Use This Manual
When most people receive a new product they want to use it right away. Unfortunately, this is not quite possible when dealing with computer hardware and software. This manual is intended to serve as a reference guide in describing the functionality and the application of the Accounts Receivable package.
The first few sections of this manual are intended to introduce the user to the Accounts Receivable (A/R) system and help get started. The latter sections are for reference when the user has specific questions about each of the Accounts Receivable applications. These applications are described later in this section under A/R Menu Bar Selections and Definitions.
It is suggested that the user first read the System Manager manual. The Package Overview section of this manual gives an overview of the Accounts Receivable package. The General Operator Instructions in the System Manager manual explains how to enter and edit data and the use of special keys on the keyboard. The Startup section gives step‑by‑step instructions on how to load the programs, create the data files, and enter the initial data. The Processing Procedures section gives direction in daily, period and year ending procedures.
The user should then scan each of the A/R sections to understand how each of the A/R applications work. A very basic description of these applications is also contained under the heading A/R Menu Bar Selections and Definitions, which is part of this Package Overview.
Data Load Sheets are included in this manual under many of the applications. These sheets may be used to manually fill out the data that must be entered at the computer. They may be helpful in easing data entry.
Sample screens and reports are also included under each of the appropriate A/R applications. These are a guide to show the user the types of screens and reports that may be obtained from the system.
Global Utilities Setup
There are many “Pick and Choose” features that can improve your productivity and Customer Service. The user should review these and also the features available in the Customer Processing manual
A General Explanation of Accounts Receivable
It can be very beneficial to you to have some understanding of the basic terms and concepts that will be used throughout the rest of this manual. Even if you have already had a great deal of experience with Accounts Receivable packages, it will be helpful to you to read through this general discussion of A/R to get an idea of how this package has put the basic accounting principles to use.
Accounts Receivable
A simple, plain English, definition for Accounts Receivable might be a record of money owed your company by its customers for goods or services the customer has received but has not yet paid for. Since the amount of money owed a company by its customers can be quite large, it is very important that the company have a way of keeping accurate records of it.
One company, which was using a manual Accounts Receivable package, bought a computerized A/R package and within the first week of using the software over $20,000 of lost Accounts Receivable was found and put on the books. The secretaries in charge of logging the amounts the customer owed had been so overloaded that they had not been able to keep up with the work and had taken to putting invoices in their drawers for later handling, which were then forgotten. When the president did some housekeeping to be sure that everything was on the computer, he found these invoices (some of which were up to six months old), sent out statements covering them and shortly afterwards collected the majority of the $20,000. Within two months of using the computer, he had nearly paid for his entire computer system.
Even though no one can promise that you'll find $20,000 of lost Accounts Receivable when you install your A/R package, an accurate record of customer invoices and payments, along with timely billings, will generate a lot of income that would otherwise slip through your fingers.
There are three main functions that an Accounts Receivable package must perform: 1) it must record the invoices generated by customer sales, 2) it must have some means of processing customer payments, and 3) it must be able to produce a statement to send the customer which details the activity which has occurred on his account and tells him how much he owes you. There are many other lesser functions that you might find you want to use once you have these three doing their job, but these are the three most important things that an Accounts Receivable package must be able to do for you.
Before we begin to talk about how these functions are handled in this Accounts Receivable package, let us define a few more terms and concepts.
The General Ledger Interface
The word interface means the place where two separate spaces, objects or packages come together and interact. The term is used to designate the way in which the Accounts Receivable package (which is primarily dedicated to handling the accounts of your customers) interacts with the General Ledger package (which is mainly concerned with the production of your company's Financial Statements).
Since Accounts Receivable activity is a very important part of a Financial Statement, it would be to your benefit if there were some way of transferring relevant data directly from the A/R package to General Ledger. Otherwise, you would have to proceed with a lengthy project of manual ledger entries every time you wanted to obtain a Financial Statement.
Even though the A/R package is oriented mainly toward the recording of purchases and payments made by your customers, it allows you some means to specify how a transaction is to be recorded in the General Ledger. Each transaction of this kind is recorded in a separate file, called the A/R Distribution to G/L file, and these distributions to G/L can be transferred to Elliott's General Ledger package any time you choose.
The most usual means these programs employ for recording G/L transactions is to allow you to enter the number of the General Ledger account in which the transaction is to be recorded, along with the amount to be recorded in that account. An account is comparable to a page in a ledger book on which you will record all of a certain type of transaction. For example, if you have to keep a record of the Sales Tax that is charged with each sale, you would record every payment of a Sales Tax in the Sales Tax Account. When you have to report the amount of Sales Tax which you have collected and now have to pay, you can go to that one account and see how much is in it.
This same principle applies to all aspects of the accounting done in this package. If a sale is made, the program allows you to specify which sales account to record the transaction. When a payment is made, you can specify which cash account will increase.
At the end of a period, or whenever you want to print Financial Statements, you can transfer these transactions to the General Ledger package without any need for manual ledger entries.
Let us now proceed to cover some of the main functions of the Accounts Receivable package.
Sales Transaction Processing
One of the functions mentioned above that an A/R package must be able to perform is the recording of purchases made by your customers. This is done by way of the Sales & CR/DR Memo Processing application. Recurring Transaction Processing is also supported by A/R.
This is basically a very straightforward set of programs that allows you to enter all of the information contained on the invoice of your customers' sales. After you have entered the invoice number, the date of the transaction and the amount of the sale, the program allows you the option of specifying which G/L account or accounts you want to record the transaction in. If you only have one sales account, one freight account, etc., you do not have to enter these G/L distributions every time you enter a transaction. One of the earlier programs in the package allows you to specify that this is the case and the Sales & CR/DR Memo Processing programs handle the posting to General Ledger accordingly.
During the entry of sales transactions, you can also enter salesman commissions and cost of sales information. Later on, you can produce a Commissions Due Report, which will show you what commissions are due to each of your salesmen and what sales generated each commission amount. You will also be able to print several Sales Analysis Reports, which will show how profitable your sales activities are.
Customer Order Processing
If you are using only Elliott's Accounts Receivable package to keep track of all of the transactions of all of your customers, you may find that a great deal of data entry is needed to record every invoice.
However, many companies can obtain great benefit from using Elliott's Customer Order Processing package, along with Accounts Receivable. The Customer Order Processing package allows you (among other capabilities) to fully process a customer's order from initial receipt of the order through to its final billing, including the printing of an invoice to send to the customer. Several other benefits are obtainable from using the Customer Order Processing package in conjunction with A/R. These are best reviewed in the COP manual.
Service Invoice Processing
This application can be used to produce service type invoices. This is a simple service entry process that can print an invoice to be sent to your customer.
Cash Receipts Processing
Now that we have covered how the package records customer purchases, we should talk about the next important function of an Accounts Receivable package: the processing of customer payments.
This A/R package has a very versatile Cash Receipts Processing application. It will allow you to enter all relevant information about checks received from your customers and allow you to specify which unpaid transactions on the customer's account are to be paid.
Again, the programs which handle Cash Receipts Processing will allow you to specify which General Ledger accounts are to be affected by the payments.
Service Invoice Setup and Printing
This application can be used to define custom service invoices. The user can define both the size of the invoice as well as what information is printed on the invoice.
Statement Printing
Once all of the sales and cash receipts transactions are recorded in the customer's account, you will now want to send the customer a statement which details all of the activity which has occurred since his last statement and tells him how much he owes you. Programs are provided that allow you to do this.
All forms necessary for this package may be purchased through the Forms Division of NETcellent System, Inc. at very reasonable prices.
A/R Menu Bar Selections and Definitions
There are many Accounts Receivable functions that can be performed by this A/R package.
Maintenance
Customer File
Allows entry of the basic information about every customer you do business with. Almost every major application in the A/R package uses the Customer File to ensure that processing of a customer is handled according to the specifications for that customer.
Salesman File
Allows you to define all the salespeople you employ. Information in this file is updated and used by other programs.
A/R Open Item File
Allows you to begin using your A/R system by entering all customer open items that are outstanding at the present time. The Set Customer Account Balances application may then be run to Set Customer Balances.
A/R Account File
Allows you to designate which G/L Accounts may be used with the A/R package.
Ship Via Code File
Allows you to build a table of Maintenance codes designating your usual methods for shipping purchased goods to a customer.
Terms Code File
Allows you to build a table of usual payment terms for payment on a customer's account. This table is used to expedite entry of data for each customer.
Tax Code File
Allows you to build a table of tax codes with their percent tax. This table is used to expedite entry of data for each customer and allow easy modifications when tax laws change.
Job Code File
Allows the user to specify allowable job numbers.
Service File
Allows the user to define Service Oriented Codes for use in Service Invoice Processing.
Customer Type File
Used for bar coding purposes
Freight Calculation Files
Used to manually or auto calculate freight charges
Credit Card Source
Inquiry
Customer Account Inquiry
Allows you to view all the transactions in a customer's account, current and historical data.
Customer File Inquiry
Allows you to view customer file records without being able to change the information.
Customer Account Summary
Adjustment Auditing Inquiry
Processing
Sales & CR/DR Memo Processing
Allows you to record transactions that have occurred. It is used to enter all A/R activity with your customers except payments.
Recurring Sales Processing
Allows you to enter invoices that occur on a regular basis.
Cash Receipts Processing
Allows you to enter payments from any of your customers and apply those payments to the customer's account.
Service Invoice Processing
Allows you to enter service invoices using the service codes you defined in the Service File Maintenance application.
Finance Charges Processing
Allows you to automatically calculate finance charges for customers that are allowed automatic charge calculations.
Post Sales & CR/DR Memo Transactions
Allows you to post all transactions that have been previously created in Sales & CR/DR Memo Processing into the A/R Open Item File.
Post Recurring Sales Transactions
Allows you to post all transactions that were previously created in Recurring Sales Processing into the sales transaction file.
Post Cash Receipts
Allows you to post all transactions previously created in Cash Receipts Processing into the A/R Open Item File.
Post Service Invoices
Allows you to post all transactions that were previously created and printed in Service Invoice Processing into the A/R Open Item File.
Post Finance Charges
Allows you to post all transactions that were previously created in Finance Charges Processing into the A/R Open Item File.
Re‑Apply CR/DR Memos
Allows you to apply a credit memo, debit memo or unapplied payment to a single or multiple invoices.
Purge Closed Open Items
Allows you to remove all transactions which have been fully paid off. This will help control file space.
Clear A/R Accumulators
Allows you to selectively reset period‑to‑date and year‑to‑date sales accumulators for each salesman, tax code, customer and service code. It also allows you to reset the customer high balance accumulator. These accumulators are primarily used to produce the Sales Analysis Reports and graph A/R information.
Set Customer Account Balances
Allows you to start your A/R system by setting account balances for each customer.
Age Customer Accounts
Allows you to set the aging period amounts in your Customer file without having to run statements. Also updates the last aging date in the Customer file.
Print Statements
Allows you to print statements which list customer activity and which tell them how much they owe you.
Print Service Invoices
Allows you to print the Service Invoices.
Customer Mail Merge
Credit Card Transaction Handling
Reports
Aging Reports
Allows you to print a report telling you how much the customer owes you, and how old these owed amounts are.
Commission Due Reports
Allows you to print a report detailing all of the commissions that are due to each salesperson.
A/R Distribution to G/L Report
Allows the user to print a report showing the distribution to G/L Accounts. The report is in three sections: 1) Income, 2) Cash Receipts, 3) Net Change to A/R.
Sales Analysis Reports
Allows you to print six reports:
1) Sales Analysis by customer
2) Sales Analysis by customer type
3) Sales Analysis by sales volume
4) Sales Analysis by salesman
5) Sales Analysis by state
6) Sales Analysis by territory
Job Analysis Report
Allows you to print a report that will show all PR expenses, A/P expenses, and A/R billed against a job and compares these to budgeted job figures.
Cash Projection Report
Allows you to print a report that will show projected cash receipts based on the customer's average days to pay their open invoices.
Auditing Adjustment Report
Sales Tax Liability Report
A/R History Report
Credit Card Log Report
Util Setup
A/R Setup
Allows you to tailor the Accounts Receivable package to the way you do accounting in your company.
Invoice Form Setup
Allows you to customize a form layout so invoices can be printed on a form designed by you. You can control both the size of the invoice as well as what information is printed on the invoice. Also allows you to use a predefined continuous or laser form layout as a template.
Print Spooled Reports
Allows you to print reports that were previously spooled to a disk file in the A/R package.
A/R Accounting Considerations
Sales
Posting to A/R valid General Ledger accounts occurs as follows:
1. The total invoice amount is automatically posted as a debit to the A/R account associated with the customer in the Customer Record.
2. Sale Amount ‑ If multiple sales accounts are not maintained in the package, all sales are posted as credits to the sales accounts entered in A/R Setup.
If multiple sales accounts are maintained in the package, the operator must distribute sales manually. The sales are posted as credits to the individual accounts.
3. Miscellaneous Charges Amount ‑ if multiple miscellaneous charges accounts are not maintained in the package, all miscellaneous charges are posted as credits to the miscellaneous charges account in the Ship Via Code file.
If multiple accounts for miscellaneous charges are maintained in the package, the operator must distribute these amounts manually. The miscellaneous charges will be posted as credits to the individual accounts.
4. Sales Tax Account ‑ Sales tax is automatically credited to the G/L account which corresponds to the Sales Tax Code in the Customer file. (See the Tax Code File Maintenance instructions for further details). Sales tax cannot be manually distributed.
5. Freight Amount ‑ If multiple freight accounts are not maintained in the package, all freight is credited to the freight account in the Ship Via Code file.
If multiple freight accounts are maintained in the package, the operator must distribute these freight charges manually. The charges are posted as credits to the individual accounts.
Cash Receipts
When cash receipts are entered, the following occurs during posting:
1. Cash ‑ If only one cash account is used, all cash is automatically posted as a debit to the cash account entered in A/R Setup.
If multiple cash accounts are maintained in the package, the cash account is entered by the operator before any receipts are entered. All cash transactions entered will be posted as debits to that cash account.
Cash receipts should be grouped by cash account. It is advisable to enter cash by bank deposit. The checks will already be grouped by proper account at this time.
2. A/R Credit ‑ All credits are made to the A/R account associated with each customer in the Customer record.
3. Discounts ‑ All discounts taken are automatically posted as a debit to the discount account entered in A/R Setup.
4. Allowances ‑ Any allowances are posted as a debit to the allowance account entered at the time of the cash receipt.
Finance Charges
Finance charge calculations are made on the entire A/R open balance of the customer. All finance charges will be debited to the A/R account associated with each customer in the Customer record. The credit will be made to the finance charges account entered in A/R Setup.
Past finance charges are not included in the debit balance upon which new finance charges are calculated.
Posting To General Ledger Files
Transactions are posted to the General Ledger files from four applications:
Post Sales & CR/DR Memo Transaction Processing
Post Cash Receipts Processing
Post Service Invoice Processing
Post Finance Charges Processing
All transactions are posted with the document date (from Sales Entry) or the check date (from Cash Receipts Entry).
Overlapping periods are not a problem since the package will segregate transactions by date on the Accounts Receivable Distribution to General Ledger Report and in theAccounts Receivable to General Ledger interface.
When closing an accounting period, all new invoices and cash received for the period should be entered before interfacing to the General Ledger. Obtain an Accounts Receivable Distribution to General Ledger Report as of the last day of the accounting period. When interfacing to the General Ledger, use the same date as a cut‑off date.
The Accounts Receivable Distribution to General Ledger Report will detail the General Ledger entries for the period. There are five sections on the report:
Income Section ‑ This section will detail all entries from the Sales Entry program. This includes all sales distribution, freight, tax, miscellaneous charges, etc. It would show a characteristically credit balance for the period.
Cash Receipts Section ‑ This section will detail all entries from the Cash Receipts Entry program. This includes cash, discounts, allowances, etc. It would show a characteristically debit balance.
Net Change to A/R ‑ Only the balance from both the New Sales Debits to A/R and Cash Entry Credits to A/R is reflected.
The information contained on the Accounts Receivable Distribution to General Ledger Report may be verified against the Sales Journals, Service Journals, and Cash Receipts Journals for the period.
Aging of Documents
The user determines whether the aging date for a document is to be its document date or its due date. There is a flag for this in A/R Setup.
For A/R Open Item File customers, payments and credit memos are applied to the earliest debit (invoice, debit memo, balance forward or finance charge) to which they apply. If none are found, they apply to the earliest document of any type whose apply‑to number matches the credit's apply‑to number. Debit memos are likewise applied to the earliest debit to which they apply, and finding none, to the earliest document of any type whose apply‑to number matches the debit's apply‑to number.
Invoices, finance charges and balances forward customarily apply to themselves, but if their apply‑to number is changed to some other document they will be aged according to the aging date of the earliest document with that apply‑to number.
Hence, for Open Item customers, documents are aged by the aging date of the documents to which they apply. If they cannot be applied, they are aged by their own aging date.
For Balance Forward customers, credit memos and payments are applied to the earliest debits on file for purposes of aging. Those debits (or credits) that remain are aged by their own aging dates.
Job Numbers
Jobs are particular projects, activities, or contracts. The purpose for setting up a job is to allow tracking of expenses associated with it in order to determine its cost. Each job for which expenses will be tracked is given a number. When each new sales transaction is entered into the system, the amount can be distributed to one or more jobs. Then, after sales transactions have been posted, a job analysis report can be printed which will itemize all expenses and amounts billed to each job and compare them to the budgeted amounts for each job.
Startup
Application Overview
Before proceeding with this section, you must have already created all directories and loaded the Elliott Programs. This is a fairly automated process. For further Instructions, please refer to the installation section of the System Manager manual.
Setup Procedure
In order to begin using the Accounts Receivable system, the following steps must be completed after creating the data files.
1. The A/R control data must be entered through the A/R Setup application in the Util_setup pull down window.
2. The valid A/R accounts must be entered through the A/R Account File Maintenance application in the Maintenance window.
3. Enter the data for the following applications in any order:
- Ship Via Code File Maintenance
- Terms Code File Maintenance
- Tax Code File Maintenance
- Job Code File Maintenance
- Service File Maintenance
4. Enter the data for each salesperson using the Salesman File Maintenance application in the Maintenance window.
5. Enter the data for each customer using the Customer File Maintenance application in the Maintenance window.
6. All outstanding open items and balance forward transactions must be entered to bring the system up to date with your books. These starting transactions are entered using theA/R Open Item File application in the Maintenance window.
7. The customer account balances must now be set to agree with the transactions entered under item 6 above. This is done by using the Set Customer Account Balanceapplication in the Processing window.
The above steps will load the system with the necessary information to process the next month's transactions. Many more reports and capabilities may be used through experience with the system and familiarity with this manual.
Processing Procedures
Daily Processing
In performing this checklist, complete each step before moving on to the next step.
Step 1 Enter invoices, credit and/or debit memos for customers
- Select Sales & CR/DR Memo Processing - Add application
Step 2 Verify the transaction entries by printing an edit list
- Select Sales & CR/DR Memo Processing - List application
Step 3 Post the transactions
- Select Post Sales & CR/DR Memos Transactions - Post application
Step 4 Print the open invoice worksheet to aid in applying cash to open invoices
- Select Cash Receipts Processing - Open Invoice Worksheet application
Step 5 Enter customer payments
- Select Cash Receipts Processing - Add application
Step 6 Verify the transactions by printing an edit list
- Select Cash Receipts Processing - Edit List application
Step 7 Post the payments
- Select Post Cash Receipts - Post application
Step 8 Record service invoice transactions
- Select Service Invoice Trx Processing - Add application
Step 9 Verify the service invoices before you print by generating an edit list
- Select Service Invoice Trx Processing - List application
Step 10 Print the service invoices on laser forms or continuous forms
- Select Print Service Invoices - Print application
Step 11 Post the service invoices
- Select Post Service Invoices - Post application
Weekly Processing
Step 1 Print statements for customers that are marked with a statement frequency of weekly
- Select Print Statements - Print application
Period End Processing
In performing this checklist, complete each step before moving on to the next step.
Step 1 Perform Daily Processing Checklist (Detailed in its entirety on the proceeding page - Step 1 through Step 11)
- All reports should be spooled to disk to allow for backup retention
Step 2 Verify and post all recurring A/R transactions
- Select Recurring Sales Processing - Add application
- Select Post Recurring Sales Transactions - Post application
Step 3 Make any changes to the recurring transactions and then post transactions
- Select Sales CR/DR Memo Processing - Change application
- Select Post Sales CR/DR Memo Transactions - Post application
Step 4 Verify, print and post all service recurring invoices
- Select Service Invoice Processing - Recurring Invoices application
- Select Print Service Invoices - Print application
- Select Post Service Invoices - Post application
Step 5 Determine status of customers by printing an aging report
- Select Aging Reports - Print application
Step 6 (optional) Re-apply open payments and credit and/or debit memos to invoices
- Select Re-Apply CR/DR Memos - Re-Apply application
Step 7 (optional) Calculate finance charges
- Select Finance Charges Processing - Calculate application
Step 8 (optional) Print an edit list to verify charges
- Select Finance Charges Processing - List application
Step 9 (optional) Post the finance charges
- Select Post Finance Charges - Post application
Step 10 Print customer statements to show their activity for the period
- Select Print Statements - Print application
Step 11 Print an end of the period aging report of the customer statuses
- Select Aging Reports - Print application
Step 12 Print a sales tax report for the period
- Select Tax Code File Maintenance - List application
Step 13 Show all distributions that have occurred for the period
- Select A/R Distribution to G/L Report - Print application
Note: If you are using Elliott’s General Ledger package, do not select the purge option. Perform the purge option during the Interface from Other Packages application inGeneral Ledger.
Step 14 (optional) Print the Commission Due Reports
- Select Commission Due Reports - Print application
Step 15 (optional) Run Sales Analysis Reports
- Select Sales Analysis Reports - Print application
Step 16 (optional) Print the Job Analysis Report
- Select Job Analysis Report - Print application
Step 17 (optional) Determine what revenue may be anticipated during the next period
- Select Cash Projection Report - Print application
Step 18 Perform a backup
- Make a period end backup of your ENTIRE Macola system to keep for auditing purposes. Label and date this backup "Period ___/___/___ End Backup"
Step 19 Clear A/R Accumulators for the period
- Select Clear A/R Accumulators - Clear application
Note: This step clears the period to date accumulators in the Customer, Salesman, Tax Code, and
Service files. If Elliot’s Customer Order Processing is installed, this step would be completed in the COP package, in the Clear I/M and A/R Accumulatorsapplication.
Step 20 Perform a backup
- Make a backup of the data files. Label and date this backup "Beginning Of Period ___/___/___ Backup"
Year End Processing
In performing this checklist, complete each step before moving on to the next step.
Step 1 Perform Period End Processing Checklist (Detailed in its entirety on the proceeding page Step 1 through Step 20)
- Save the backup labeled "Period End Backup" with your other period end backups
- Backup labeled "Beginning Of Period Backup" from Step 20 is optional for
Year End Checklist
Step 2 (optional) Run sales analysis reports
- Select Sales Analysis Reports - Print application
Step 3 Perform a backup
- Make a final year-end backup and keep for auditing purposes. Label this backup "Final Year 20___ End Backup"
Step 4 Clear Year to Date Accumulators
- Select Clear A/R Accumulators - Clear application
Note: This step clears the year to date accumulators in the Customer, Salesman, Tax Code and Service files. If Elliott’s Customer Order Processing is installed, this step would be completed in the COP package, in the Clear I/M and A/R Accumulators application.
Step 5 Perform a backup
- Make a beginning of the year backup and label it "Beginning Of The Year 20___ Backup"
A/R Main Menu
Application Overview
This application presents the menu of Accounts Receivable applications that are available to the user. The menu consists of six pull down windows.
The Maintenance window contains applications to maintain the A/R package.
The Inquiry window allows you to view customer account and file information without the ability to change any record.
The Processing window is where most of your activity will take place. Entering transactions and posting/updating this information to other files.
The Reports window presents a wide selection of management and analysis reports that will assist you in making company decisions.
The Util_setup window accesses files that need to be set up in order to tailor the software to meet your company's needs.
After the application has been run to completion, the A/R menu bar will display once again and allow entry of another application.
A/R Maintenance Pull Down Window
A/R Inquiry Pull Down Window
A/R Processing Pull Down Window
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A/R Reports Pull Down Window
A/R Util Setup Pull Down Window