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DMS Accounts Receivable FAQ's:
Q1: What is the structure of the Customer Account
Number?
A1: Although most users assign numeric
values for customer account numbers, the customer number in DISTRIBUTION
EXPRESS is a ten character value that may contain either alpha or numeric
input.
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Q2: Are new customer numbers automatically assigned?
A2: No. The last customer number added
to the system is displayed on the initial customer maintenance screen
but there are no provisions to have a system assigned customer number
generated.
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Q3: In a Multi-locations environment, do
you have to use separate customer numbers to track A/R by location?
A3: No. A single account number, common
to all locations, should be assigned to each customer. An invoice or credit
memo is tracked by its number (a seven digit sequentially assigned number),
its payment number (a three digit number beginning with 001 and incremented
by one for each expected payment) and location code (a four digit character
code identifying the locations that generated the transaction). Typical
formats are shown below:
INV/CRD#
DTG LOC
1234567
001 RKMT
1234567
001 CHAR
1234
001 ATLA
12345
001 RAL
12345
002 RAL
12345
003 RAL
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Q4: What determines the beginning and ending dates
of each period?
A4: A control file keyed by year contains
thirteen buckets each with a beginning and ending date determines a period.
The system supports either twelve or thirteen periods. For Balance Forward
and Monthly Open Item billing methods, a due date is also assigned to
each period. For customers designated for Julian billing, the due date
is calculated from the invoice date based on the number of days delay
specified in the billing terms associated with each invoice.
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Q5: Can transactions in the current
month be processed without first closing the preceding month?
A5: Yes. Each invoice or credit memo
has a transaction date and a due date calculated from the terms code.
These are assigned when the transaction is created and is totally independent
of the closing job stream. In fact, the monthly closing procedure does
little more than read each transaction in the A/R file and flag it as
having been processed. Transactions without this flag are listed on the
monthly reports while those having the flag are omitted because they appeared
on reports for a previous close.
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Q6: Can a transaction be allocated to a closed
period?
A6: Yes. The user will be warned at
Order Entry that the transaction date has been overridden to a date falling
within the range of a previously closed period. Requesting the release
a second time will generate the invoice or credit memo. During the month
end closing process, separate reports will be generated for each period
of activity. Transactions belonging to a previously closed month will
be segregated from the current month's activity.
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Q7: How are transactions aged?
A7: Transactions may be aged from either
the invoice date or the due date. By far, due date aging is most common
but either method is supported. For reporting purposes, transactions are
assigned to one of six user defined aging periods. Typically, these are
"Future due", "Current month", "Current due",
"31-60 days", "61-90 days" and "91 days and over"
but these can be varied as needed. When an aging report or inquiry is
requested, the system uses today's date as the basis for determining which
aging period a transaction belongs.
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Q8: Is Accounts Receivable "Real Time?"
A8: Order entry activity is posted to
the permanent A/R files during the daily closing process. Cash application
activity (payments, adjustments, discounts and credit/debit offsets) is
updated when the user takes the option to post the detail he or she has
entered.
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Q9: Does the systems support future billing
and split billing?
A9: Yes. The Terms Code assigned to
an invoice determines the number of months (Customers designated as Balance
Forward or Open Item) or the number of days (Julian billing) delayed before
the first payment is due. Payments may be deferred for up to 999 months
or 999 days. Other parameters related to this feature are the number of
payments (1 - 999) and the number of months/days (0-999) between payments.
Examples
of typical terms codes are:
MTHS
DELAY # of PYMTS MTHS BETWEEN DESCRIPTION
0
1 0 Net 30th Prox
0
3 1 30-60-90 Dating
12
1 0 12 Mth Deferred Billing
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Q10: How long does the system retain payment
history?
A10: Payment history is retained indefinitely.
Invoice and payment data is purged for all records older than a user specified
date.
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Q11: Can a statement be printed at any time?
A11: Yes. Customer statements are totally
independent of any closing process. A user defined statement code is assigned
to each customer. At a minimum, these codes are "Y" (Print statement)
and "N" (Do not print; Used for cash customers). Additional
codes such as "W" (Weekly) or "TOM" (Salesrep Tom
Smith's accounts) may be defined as needed. The statement print job prompts
for the statement code(s) to be included in the selection. Statements
can also be printed for a single customer by entering the account number.
Another feature is the ability to print statements "as of any previous
date". If, for example, a customer needs a copy of their statement
from three months previous, the "Include activity through" parameter
should be set at the ending date of that month. By doing so, all A/R activity
subsequent to that date will be excluded from the statement.
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Q12: How are over-payments handled?
A12: A payment in excess of the open
balance or a payment that, for whatever reason, cannot be linked to specific
invoices can be posted to an account as an open credit. Within a cash
application session, a payment can be fully applied against one or more
invoices, partially applied against one or more invoices with the remainder
posted as "Unapplied Cash" or the entire payment amount may
be posted as "Unapplied Cash". At a later date, these credits
may be offset against any open debits if desired.
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Q13: How does the system handle service charges
on past due balances?
A13: Each customer master record carries
a flag indicating if that account will be subject to service charges on
past due balances. A control record is used to define the service charge
percentage, the minimum amount that must be past due before a service
charge will be applied, the minimum service charge amount that will be
assessed and the effect that credits in a current period will have in
determining the amount past due. These controls may be set for each location
or by a group of locations. Prior to printing customer statements, the
"Calculate Service Charge" routine is selected. Accounts having
the "Subject to service charge" flag set to "Y" that
meet the minimum past due amount will have a service charge calculated
and written to a work file. These charges can be listed and edited before
being posted to the Open A/R Detail file.
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Q14: How are NSF payments handled?
A14: Payments returned for Non-sufficient
Funds may be handled in either of two ways. The most common method is
to manually create a single batch invoice for the amount of the check
and a second invoice for the returned check charge although these may
be lumped into a single transaction if desired. It is also possible to
"re-open" all transactions affected by the returned check by
making reversal adjustments for the payment amount affecting each invoice.
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Q15: What capability exists to attach notes to a customer
or to a transaction?
A15: The A/R module offers extensive
note and messaging facilities. During Cash Application or from the A/R
inquiry function, a message containing up to 999 lines of text can be
attached to a transaction. Each line has parameters that control whether
or not that specific message line will be printed on the customer's statement
and/or on the Aged Trial Balance Listing. Additionally, the system offers
a Notes feature with full user, date and subject sensitive inquiry selections.
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Q16: What credit controls are available at Order
Entry?
A16: Order entry will perform interactive
credit checks based on the customer's available credit and/or past due
status. Flags in the customer file are set to:
1) Bypass these checks
2) Warn the order entry user that the account
has failed one
or both of these tests but allow the order to be processed.
3) Warn the user that the account has failed
one or both of these tests and require that a security code be entered
before a ticket or invoice can be generated. The most severe restriction
is to place a customer on "Hold". The system prevents orders
from even being initiated for accounts flagged for this action.
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Q17: What tools are available to evaluate a customer's
credit?
A17: In addition to an account's current
A/R status by age code, the A/R Inquiry gives the date the customer was
first added to the data base, the highest owed amount and date, the last
payment amount and data, the last invoice amount and date, the average
number of days from due date for all open invoices, the number of invoices
and the average number of days from due date before/after payment was
received by quarter for each of the last three quarters.
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Q18: What tools are available to assist with collection
of past due balances?
A18: An on-line inquiry allows the credit
manager to easily prioritize his or her collection efforts based on the
amount and age of the past due balance. All detail including the phone
number and name of the customer's A/P clerk and the invoices past due
are readily available. With the FAX module, copies can be faxed without
ever leaving the desk. The Notes Feature also supplements collections
by providing the ability to record date sensitive follow-up messages.
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Q19: What Accounts Receivable reports are available?
A19: The standard Accounts Receivable
reports are:
- Aged Trial Balance (Summary or Detail,
By or Across locations)
- Invoice Register (Daily or Monthly, By
location)
- Activity Summary (Daily or Monthly, By
location)
- Over Credit Limit / Past Due Listing
- Daily Check Audit report (for reconciling
daily deposits)
- Customer statements
- Open Deposits Listing
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Q20: Can multiple clerks apply cash simultaneously?
A20: Yes. Each clerk works independently
of all other cash application clerks with the ability to list, edit and
post only transactions he or she entered. The only restrictions are:
1) Two users cannot apply cash to the same
customer concurrently
2) A single invoice cannot have two different
checks applied to it within the same session.
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Q21: How does Accounts Receivable interface to General
Ledger?
A21: The G/L interface, normally nested
within day close, reads each invoice, credit memo, payment, adjustment,
discount and offset and creates a journal entry that debits the proper
G/L account number for the amount of that transaction. A mask based on
the attributes of each entry (location, department, customer type, adjustment
code etc.) dictate which account number will be affected.
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Q22: Can invoice or credit transactions
be generated without going through Order Entry?
A22: Yes. A Batch A/R feature provides
the ability to create debit and credit transactions simply by entering
the account number, date and amount to be posted.
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Q23: What tools exist to track adjustments?
A23: All A/R adjustments must reference
a three character user-defined code associated with an adjustment reason.
Some of the more common uses for this are: "NSF" (Re-instate
an invoice due to a returned check), "SWO" (Service charge write-off),
"BDW" (Bad debt write-off) etc. With over one hundred possible
code combinations, the number of adjustment reasons is virtually unlimited.
The Cash Application Edit and Post listing break out all adjustments by
customer and invoice as well as providing a summary total by adjustment
code. A separate G/L account may be created for each adjustment code or
they may be grouped into multiple accounts.
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Q24: Can a previously paid invoice be re-instated?
A24: Yes. Any payment, discount, adjustment
of offset posted to an invoice can be reversed through an adjusting entry.
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Q25: Are cash sales made in a point of sale
environment tracked through Accounts Receivable?
A25: Yes. All order entry activity including
that created through a point of sale environment is posted to Accounts
Receivable. A cash sale made to a walk-in customer will cause an invoice
to be generated in the A/R master file with an offsetting payment being
written to the A/R detail file. This provides a full audit trail for all
activity.
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Q26: How are branch transfers handled with regards
to Accounts Receivable?
A26: Shipments between locations are
handled in the same manner as all other order entry transactions. An order
is created (either manually or by converting a transfer request), invoiced,
processed through day close and updated to A/R where it is subject to
the same type of payment processing as transactions for regular customers.
However, an internal account is identified as such in the customer master
file. All A/R reports and inquiries automatically segregate activity based
on regular accounts, internal accounts and vendor (supplier) returns.
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