Overview of Accounts Receivable
Every Sales Order in the system will ultimately result in an Accounts Receivable Invoice to the Customer. These invoices can be printed or emailed directly to the Customer from the system. Customer payments are posted against the invoice(s) and reports will track the Receivables Aging and Balances Due.
There are four (4) separate Financial Posting Events associated with the AR process:
- by the creation of the AR Invoice,
- by the Customer Payment > Accepted,
- by the Customer Payment > APPLIED (to specific invoice(s), and
- by the Bank Deposits process.
Video 28 minutes
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1. Financial Impact of Creating an AR Invoice
Balance Sheet - Accounts Receivable Asset GL is Debited
Income Statement - Sales GL is Credited
2. Financial Impact of Customer Payment > Accepted*
Balance Sheet - Customer Deposits GL is Credited
Balance Sheet - Undeposited Funds GL is Debited
3. Financial Impact of Customer Payment > Applied to an Invoice*
Balance Sheet - Accounts Receivable Asset GL is Credited
Balance Sheet - Customer Deposits GL is Debited
4. Financial Impact of the Bank Deposit process
Balance Sheet - Undeposited Funds GL is Credited
Balance Sheet - Checking GL (or the selected Asset GL) is Debited
* Steps 2 and 3 usually occur at the same time while posting the Customer Payment. All four associated ledger events will post.
Reports
Receivables AgingReceivables Aging (by Personnel)
Received (All AR Payments)
Received Credit Cards (AR Payments)
Remittance DetailUnapplied Funds (Customer Payments that have not yet been Applied to any AR Invoices)
Bank Deposits
Bank Reconciliation
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