About Accounts Receivable
The Accounts Receivable (A/R) application lets you monitor and update your customers accounts. Each accounts receivable account represents the amount owed by a customer for purchases (orders) or services. Through the Accounts Receivable application, you can build and maintain a complete and accurate history for all your customer's accounts receivable activity.
All customer orders created in Order Entry automatically post to accounts receivable. This automatic posting increases the efficiency and accuracy of your accounting. Since you don't have to enter the invoices in A/R, you can eliminate the time you would otherwise spend entering each charge and credit. Automatic posting also eliminates keystroke errors. This reduces your labor costs, since you spend less time correcting errors.
In addition, you can use parameters to set your general ledger accounts. You do this in the (L2) G/L Master Numbers screen. Even though your invoices may be divided into multiple general ledger accounts, one lump sum gets posted to accounts receivable. When you print the A/R Batch Report, you can view the detail of each posting in a batch as well as the total of all postings made in a batch. Accurate reporting lets you give your customers better service. Accurate totals also let you easily determine and balance your daily cash flow.
Besides automatically posting customer charges, the accounts receivable application calculates and posts accurate charges for past due accounts. This occurs when you age your accounts by printing the A/R Trial Balance Report. This report provides account information for each customer, and provides aged totals for each customer account. Aging determines how old each invoice is, and divides a customer's balance into four subtotals: current, over 30 days old, over 60 days old, and over 90 days old. Again, this process eliminates keystroke errors and the hours spent manually calculating finance charges.
The primary function of accounts receivable is posting customer payments. When you do, you can mark the invoices to pay, or you can enter limits and automatically identify those invoices that need to be paid.
Other functions the application supports include correcting a customer's discount amount, changing a purchase order number, and making adjustments. You can easily perform these functions in the Accounts Receivable Posting window. Remember, however, that there should be few manual adjustments and manual postings, because the application is designed to post accounts with correct figures. On those rare occasions when mistakes occur, it may be necessary to make a manual entry because a payment was applied to the wrong invoice number.
Note: When customers place a prepay order, any payments, credits, or adjustments you make against the customer's account in the Accounts Receivable Posting window do not affect the customer's credit limit. For more details, see About Credit Limits.
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