> Accounts Receivable Introduction

Accounts Receivable Introduction

The Accounts Receivable module provides users with extensive control of customer information. Analysis and reporting can be performed on an open-item or balance-forward basis using various ageing options. Information for a defined series of related customers may be accumulated into a single master account for consolidated statement printing. It allows for free-format stationery designs for statements and recurring invoices.

Receivables can be held in local or foreign currency. The system is fully compliant with European Monetary Union ( EMU) requirements. Extensive cash posting facilities exist, which include post dated check entry and posting, miscellaneous unassigned cash receipts and the facility to post cash received to invoices manually or automatically by invoice or aged date.

Configuring Accounts Receivable

This task outlines the procedures you should follow to set up your Accounts Receivable module before you begin to process transactions.

Some of these steps are optional and depend on how you intend implementing this module.

  1. Navigate to the Set Key Information program.

    Indicate the properties and numbering method you require for the Customers, AR invoices/settlement and AR pyment run keys.

  2. Navigate to the General Ledger Codes program and define the General Ledger control accounts for the Accounts Receivable module.

    If you want to integrate Accounts Receivable to the General Ledger, then you require the following account codes in the General Ledger:

    • Accounts Receivable control account.

      You can define one A/R control account per branch or a single A/R control account for the company.

    • Default Sales account for merchandise sales
    • Default Sales returns account

    • Trade discount account

    • Cost of sales account

    • Exchange rate variance or Currency variance account if you have foreign currency customers.

    • Adjustment value (Tax) account if you enabled the option: Request tax portion for invoice (Accounts Receivable Setup).

    • Withholding tax account, if you enabled the option: Withholding tax required (Company Tax Options Setup).

    • Contra suspense account if you want to offset (contra) customer and supplier invoices using the Customer-Supplier Contra program. This should be the same Contra suspense account defined in the Accounts Payable module.

    • Inter branch sales and Inter branch cost of sales accounts (IBT sales and IBT cost of sales) if you want to use IBT order types in the Sales Order Entry program.

    • Freight charges account for sales

    • Finance charges account if you are charging your customers finance charges on overdue accounts.

    • Rounding errors account

    • Deposit revenue account for deposits taken in Counter sales (Sales Order Entry) and Point of Sales (Point of Sale Entry).

    • Output sales tax account or GST account

    • Freight cost of sales account

    • Non-stocked miscellaneous cost of sales account

    • Settlement discounts account for settlement discount taken by customers

    • Adjustment account for miscellaneous adjustments to customer balances

    • Deposits liability account if you are using counter sales and taking deposits from customers

  3. General Ledger Integration

    1. Navigate to the General Ledger Integration program and indicate the following:

      • the Integration level you require for Accounts Receivable.

      • the level of automation for creating and posting General Ledger journals for Accounts Receivable.

      • the point at which you want to force entry of analysis information, if you are using the General Ledger analysis facility

    2. Navigate to the General Ledger Integration program and indicate the General Ledger control accounts for Accounts Receivable.

    3. Select the Branches option.

      Using the AR Branches program, define your Accounts Receivable branch(es). These are used to integrate the Accounts Receivable module to the General Ledger.

    4. Select the Sales Interface option.

      Using the AR Sales Ledger Interface program, define the General Ledger accounts for each AR branch.

    5. Select the Payments Interfaces option.

      Using the AR Payments Ledger Interface program, define the interface ledger accounts required for payments, adjustments, discount and deposit entries.

    6. Select the Variance Interfaces option.

      Using the AR Currency Variance GL Interface program, define the interface ledger accounts by branch/currency for the revaluation of outstanding foreign currency customer invoices. This only applies if you have foreign currency customers.

    7. Select the Maintain tax Codes function.

      Using the Tax Code Setup program, add and maintain the tax codes to use for a basic tax system or a tax system based on geographic areas, if you are not using the USA tax system.

      If you are using the USA tax system, then you use the equivalent Browse on Extended Tax Codes program.

  4. Accounts Receivable Setup

    Define the Configuration, Preferences, Financial Periods, History and User Defined Fields setup options you require for Accounts Receivable.

  5. Tax Setup

    Define the tax options required for your Accounts Receivable module.

    If you enabled the option: EC VAT system required (Company Tax Options Setup) then you need to:

    • Use the Nationalities program to define the nationality codes for your customers.
    • Use the Intrastat Transaction Nature program to define the nature of transaction codes for your customers.
    • Use the Intrastat Delivery Terms program to define the delivery terms for your customers.

  6. Cash Book Setup

    Enable the option: Foreign currency cash book required (Cash Book Setup) if Accounts Receivable is linked to the Cash Book (General Ledger Integration) and you want to process payments against foreign currency customers.

    This allows you to keep your cash book in the local currency and post foreign currency transactions to it. The transactions are converted into the local currency when they are posted into the cash book.

  7. Optionally select the Currencies program to define the exchange rates required for your Accounts Receivable module.

    This step is required if you want to process transactions for foreign currency customers.

  8. Use the AR Branches program to add the AR branches against which you want to process sales and payments for your customers.

  9. Use the Geographic Areas program to add the geographic areas to which your customers will be assigned.

  10. Use the Product Classes program to add the product classes for grouping together your merchandise items.

  11. Use the Salespersons program to add the salespersons that will be assigned to your customers.

  12. Use the Customer Classes program to add the classes to which you will assign your customers.

    This is required if you enabled the option: Validate customer class on AR master (Accounts Receivable Setup) because you will have to enter a valid customer class when capturing details for your customers.

  13. Use the AR Invoice Terms program to add the default settlement discount you want to extend to a customer whose payments are made within a prescribed period of time and to define when an invoice becomes due for payment.

    If you want to define your own ageing buckets for settlement discount and invoice ageing, then you need to use the AR Terms Ageing Headings program to define the headings to display in queries and reports for these ageing buckets.

  14. Use the AR Invoice Discounts program to define invoice discount codes. These discounts can be used when a stock item's pricing method is set to discounted (Stock Codes) when a simple or an extended pricing method is used (Sales Orders Setup).

  15. Use the Order Discount Breaks program to define percentage discount breaks which enable you to vary prices according to the quantity or value of items on a sales order.

  16. Use the Customers program to take on the details of your customers.

  17. You can use the AR List of Customers program to print the information for the customers you took on to check this information for accuracy.

    Alternatively, you can use the Create Report program to define your own report to print and verify the information you added for your customers.

  18. If you set the option:Amendment journals required to Yes or Yes, including additions (Accounts Receivable Setup) then you can use the Customer Amendment Journal program to print the Amendment Journals as a record of any maintenance performed using the Customers program.

  19. Use the Multiple Ship to Addresses> program to add any additional delivery addresses for selected customers.

  20. Use the AR Statement Format program to define the page layout for printing your customer statements.

    This enables you to print customer statements using the Statement Print program.

  21. Use the AR Initial Invoice Capture program to take on historical information from your previous system.

    None of the entries made using the AR Initial Invoice Capture program are posted to the Sales Analysis or General Ledger modules. Capturing or deleting invoices using this program automatically updates the Balance forward value in the Accounts Receivable Control record (AR Company Control Balances).

  22. Generate the AR Trial Balance report to check that the historical information you captured is correct for each customer and that the report total matches your current Accounts Receivable control account balance in your General Ledger.

    Retain the report for your auditors.

  23. Use the AR Initial Sales History program to capture the previous 24 months' sales history information for specific customers. This information is used mainly by the Sales by Customer Report in the Sales Analysis module.

  24. Use the Master Sub-accounts program to establish any master/sub-account relationships between selected customers.

  25. Use the Customer Stock Codes program to create a link between a customer's stock code and a valid SYSPRO stock code.

    This is required if you want o be able to enter the customer's stock code during processing in the Sales Order Entry program and have the system automatically extract the SYSPRO stock code.

  26. Use the Customer Stock Code Cross-Reference program to link customers selectively to specific SYSPRO stock codes and to maintain the last sales details for specific customer/stock code combinations.

  27. Use the AR Permanent Entries program to define permanent entries that you want to post to customers on a recurring basis.

  28. Use the AR Permanent Entries Format program to define the page layout required for the printing of your permanent entry invoices.

    This is required if you want to use the AR Post Permanent Entries program to print invoices for permanent entries.

  29. Use the AR Discount Notes Format program to define the page layout required for the printing your discount debt and credit notes.

    This is required if you want to use the Settlement Discount Notes program to print discount credit and debit notes.

  30. Use the AR Label Format program to define the stationery format required for printing customer labels.

    This is required if you want to print customer labels using the AR Label Print program.

Accounts Receivable Period End Processing

The following sections outline the procedures that you should follow to ensure that the integrity of the Accounts Receivable system is maintained.

Pre-month end reporting

  1. Ensure your daily procedures for Accounts Receivable are complete.

  2. If you defined permanent entries, then run the AR Post Permanent Entries program.

  3. If you are charging your customers finance charges, then run the AR Finance Charge Calculation program.

  4. If the option: Create general ledger journal is not enabled for Accounts Receivable (General Ledger Integration) then run the AR Invoice GL Integration and AR Payments GL Integration programs to ensure that all the General Ledger journals for transactions processed in the Accounts Receivable module are created.

  5. If the option: Post general ledger journal is not enabled for Accounts Receivable (General Ledger Integration) then use the GL Journal Entry or GL Post Multiple Normal Journals program to post the General Ledger journals for Accounts Receivable into the General Ledger.

  6. Print an Accounts Receivable balance report using the Balance function of the AR Period End program.

  7. Print a trial balance including all customers using the AR Trial Balance program.

  8. Ensure that the balance in the Accounts Receivable control account(s) in the General Ledger balance to the total of the Accounts Receivable Trial Balance report and to the A/R resulting balance total on the Accounts Receivable balance report.

    You can also check that the total Accounts Receivable amount agrees with the sum of the Accounts Receivable control accounts in the General Ledger by comparing the total of the Summary Credit Management or Credit Management reports to the Accounts Receivable control accounts in the General Ledger.

    Resolve any discrepancies before continuing.

  9. Generate customer statements using the Statement Print program.

  10. Optionally print the following reports as required:

    • AR Trial Balance. Although you can print a trial balance as often as required, it should be printed at month end to verify account and invoice accuracy.
    • Credit Management
    • Summary Credit Management
    • AR Customer Movement Report
    • Reprint the AR Sales Distribution and AR Payments Distribution reports for the entire period. This produces full consolidated distribution reports for the month. These reports can also be reprinted after month end.

    • Reprint the AR Invoice Register and AR Cash Journal for the entire period as an audit trail.

Reconciliation to General Ledger

The balance in the Accounts Receivable control account(s) in the General Ledger should balance to the total of the Accounts Receivable Trial Balance report and to the A/R resulting balance total on the Accounts Receivable balance report (AR Period End).

You can use the table below to assist you in balancing the total Accounts Receivable amount (from the Accounts Receivable module) to the sum of the Accounts Receivable control accounts in the General Ledger.

Report Value Difference
A/R Trial Balance total    
A/R control for previous month    
G/L control account total for previous month    

It is assumed that you are using the multi-period accounting feature and that at the time you want to reconcile the two modules (as of the end of a month) you are already posting amounts into the next month.

Based on this assumption, you want to:

  • print an Accounts Receivable Trial Balance as of the previous month end
  • use the Accounts Receivable control total as of the previous month end
  • use the sum of the Accounts Receivable control accounts in the General Ledger.

Enter these three numbers in the left hand column of the table, and any differences between these numbers in the right hand column.

The only differences should be as a result of transactions not being posted to the General Ledger, or posting transactions through to the General Ledger in a different period to that which they were posted to in the Accounts Receivable module.

If these are not the only differences, then:

  • Check that all journals were created and posted into the General Ledger.

    • If the option: Create general ledger journal is not enabled for Accounts Receivable (General Ledger Integration) then run the AR Invoice GL Integration and AR Payments GL Integration programs to ensure that all the General Ledger journals for transactions processed in the Accounts Receivable module are created.
    • If the option:Post general ledger journal is not enabled for Accounts Receivable (General Ledger Integration) then use the GL Journal Entry or GL Post Multiple Normal Journals program to post the General Ledger journals for Accounts Receivable into the General Ledger.
    • You can use the GL Journal Entry program to generate a report of Accounts Receivable sub module journals not yet posted or on hold.
    • You can use the AR Invoice Register together with the AR Sales Distribution Report to assist you in identifying the Debit entries in the General Ledger control accounts. Similarly, you can use the AR Cash Journal and the AR Payment Distribution reports to identify the Credit entries.

  • Check that no journals other than journals from sub-modules were posted into the Accounts Receivable control account(s) in your General Ledger. You can generate a detailed Trial Balance report (GL Trial Balance) of all the AR control accounts to assist you. Only journals with a source type of AR and SA should appear in these control accounts. If transactions for any other types of source codes exist, then these must be identified and reversed if invalid.

Month end close

[Note]

It is strongly recommended that you take a backup of your data before processing a Month end, a Year end or a Purge.

After you have completed the pre-month end reporting process:

  1. Select the Month end only or Month end and purge option from the AR Period End program to close off the current Accounts Receivable period and to enable you to process transactions for the following period.

  2. Indicate the After processing completed options you require.

  3. Select Start Processing.

  4. Check the final page of the report produced to ensure that the month end was completed without errors.

  5. Run the AR Company Control Balances program and check the Posting Information to verify that the month number now reflects the new month.

Purge

You can purge (delete) detail transactions from Accounts Receivable files when they are no longer needed as follows:

[Note]

It is strongly recommended that you take a backup of your data before processing a Purge.

  1. Select the Purge only function from the AR Period End program.

  2. Check the Purge details section of the AR Period End program to verify that these are the details you want to delete.

  3. Indicate the After processing completed options you require.

  4. Select Start Processing.

  5. Reindex the Accounts Receivable module files using the Reindex Files program.

Year End

The year end procedure is similar to the month end procedure except that it can only be processed in the final accounting period of your financial year. The year end process transfers current year information to previous year and sets the current year-to-date information to zero.

[Note]

It is strongly recommended that you take a backup of your data before processing a Year end.

  1. Ensure that the pre-month end reporting procedure is completed.

  2. Select the Year end function of the AR Period End program to close off the final Accounts Receivable period of the financial year and to enable you to process transactions for the first period of the following financial year.

  3. Indicate the After processing completed options you require.

  4. Select Start Processing.

  5. Check the final page of the report produced to ensure that the year end was completed without errors.

  6. Run the AR Company Control Balances program and check the Posting Information to verify that the month number now reflects the first month of your new financial year.

Balancing

Balancing totals and audit trails are provided throughout the system.

The following programs may be run at any time to facilitate balancing and ensure account and invoice accuracy.

  1. Select the Balance function of the AR Period End program.

    This function verifies the Accounts Receivable company balance to ensure account and invoice accuracy, and produces month-to-date totals of invoices, credit memo, debit memos and adjustments.

  2. Print an Accounts Receivable trial balance using the AR Trial Balance program to compare the balance with total on the AR Period End report.