v.5 Accounts Receivable: Best Practices

Transcription

1 v.5 Accounts Receivable: Best Practices (Course #V212) Presented by: Bill Ballou Training Manager Shelby Systems 2017 Shelby Systems, Inc. Other brand and product names are trademarks or registered trademarks of the respective holders.

2 Objective This workshop guides you through the best practices of using Accounts Receivable. This session presents the following topics: Basic setup information Process credits (discounts) and scholarships Issue refunds Write off an outstanding balance Deal with unapplied cash Unpost an invoice Void a payment Process ACH information 2

3 Make sure the basics are set up correctly Setting up Accounts Receivable correctly helps avoid common mistakes in processing accounts receivable transactions. Company Information Interface with General Ledger Accounts Receivable Type Revenue Center Account Category Assign to ACH Account 3

4 Item Information Monthly Tuition Discounts Scholarships Other Charges 4

5 ACH Information Bank and routing information ACH file location 5

6 Processing credits (discounts) and scholarships Credits and scholarships are set up as an item in Item Information (Accounts Receivable Home base > Utility > Setup Information > Item Information). Credits normally are considered discounts. For accounting purposes, both discounts and scholarships should have their own General Ledger accounts for tracking purposes. Set up item in Item Information. Link to discount/scholarship account in General Ledger. How is the discount/scholarship applied? Recurring One time 6

7 Apply discount upon payment. 7

8 Issue a refund To process refunds, it is good business practice to have the transactions you create provide a solid audit trail for both the church and the customer. Set up a refund liability clearing account in your Chart of Accounts. Two new items need to be set up: Dropped item linked to an income account Refund item linked to the liability clearing account 8

9 How to process examples (audit trail is created) Dropped Class No payment received; write off balance of $300. Journal Entry created: Account Debit Credit Tuition Income $ Accounts Receivable $

10 Dropped Class Customer paid in full $300 and gets full refund. On the Invoice Entry screen Detail tab, enter Dropped Item as a negative amount. On the next line enter Refund Item for the same amount as a positive amount. Issue a refund check and distribute to the refund liability clearing account for $300. Journal Entries created: Account Debit Credit Invoice Posted in AR: Tuition Income $ Refund Clearing Account $ Refund Check Posted: Refund Clearing Account $ Cash $

11 Dropped Class Customer paid partial amount of $100 and gets full refund. On the Invoice Entry screen Detail tab, enter Drop Item as a negative amount. On the next line enter Refund Item for $100 as a positive amount. Issue a refund check and distribute to the refund liability clearing account for $100. Journal Entries created: Account Debit Credit Invoice Posted in AR: Tuition Income $ Accounts Receivable $ Refund Clearing Account $ Refund Check Posted: Refund Clearing Account $ Cash $

12 Dropped Class paid in full $300 and gets partial refund of $150. On the Invoice Entry screen Detail tab, enter Dropped Item as a negative amount. On the next line enter Refund item for the same amount as a positive amount. Issue a refund check and distribute to the refund liability clearing account for $150. Journal Entries created: Account Debit Credit Invoice Posted in AR Tuition Income $ Refund Clearing Account. $ Refund Check Posted Refund Clearing Account $ Cash $

13 Dropped Class No payment received and customer still owes $90. On the Invoice Entry screen Detail tab, enter Dropped Item as a negative $210. Journal Entry created: Account Debit Credit Tuition Income $ Accounts Receivable $

14 Write off an outstanding balance Sometimes it is necessary to write off an outstanding balance on a customer s account. In order to create a good audit trail, this entry should be processed through Payment Processing. Correctly set up Revenue Center Information. NOTE: A Write Off is an expense to the organization to offset the expected income (or liability) entry. 14

15 How to process examples that create audit trail Partial payment received write off 50%. Payment of only $150 is received Apply $150 towards the outstanding Invoice and the remainder to Write Off. Journal Entry created: Account Debit Credit Cash $ Write Off $ Accounts Receivable $

16 No payment received write off 100%. Journal Entry created: Account Debit Credit Write Off $ Accounts Receivable $

17 Dealing with unapplied cash There are times when a customer pays more on his account than what is invoiced. This creates the mystery of unapplied cash. Below are a couple of solutions for dealing with unapplied cash. Make sure you have the Unapplied Cash General Ledger link set up correctly under the Revenue Center. 17

18 How does Unapplied Cash happen? If you are processing a payment and the amount of the check is more than the amount of outstanding invoices, the difference between the amount of the check and the amount applied to the outstanding invoices creates the unapplied cash amount. This amount can be applied to a future invoice. Journal Entry created: Account Debit Credit Cash $ Accounts Receivable $ Unapplied Cash $

19 Run the Unapplied Cash report and then apply the balance. List prints a list of all unapplied cash Apply applies all unapplied cash to each customer that has unapplied cash on his or her record and has an outstanding balance Journal Entry created: Account Debit Credit Unapplied Cash $ Accounts Receivable $

20 Apply to existing invoice. Go to Payment Processing, select the Bill To, leave Check # and Check Amount blank and enter Date. Click the Add Unapplied Cash button to add the balance of Unapplied Cash. 20

21 On the Apply to Invoices tab enter the amount of Unapplied Cash to apply under Check. Journal entry created: Account Debit Credit Unapplied Cash $ Accounts Receivable $

22 Issue a full refund of unapplied cash balance. On the Payment Entry window select the Bill To, leave Check # and Check Amount blank, and enter the Date. On the Misc. Cash tab enter Revenue Center, Department # and Account # of the refund liability clearing account, and in the Check column enter the amount of unapplied cash refund. Click the Add Unapplied Cash button to enter the amount of the unapplied cash on the second line automatically. Journal Entry created: Account Debit Credit Unapplied Cash $ Refund $ Issue a check from Accounts Payable and record the disbursement to Refund account. 22

23 Unpost an invoice Sometimes it is necessary to unpost an invoice. This happens when the original invoice was posted incorrectly to a customer or to the wrong customer. By unposting the invoice, the invoice is completely removed from the customer s record. This leaves NO AUDIT TRAIL in the customer s AR account. From the Accounts Receivable Home Base screen select the Inquiries option. Select the Customer. Select the Open Invoices Only check box. Select the Removable Invoices check box. Do not apply any other filters. Click the OK button. 23

24 On the Inquiries grid results: Highlight the invoice to unpost. Click the Unpost Inv button. Journal Entry created: Account Debit Credit Tuition Income $ Accounts Receivable $

25 Go to Invoice Processing. Delete the unposted invoice (removes from AR inquiry). Correct invoice and save again. From the Invoice Processing screen Delete or correct unposted invoice. 25

26 Void a payment There are times when a customer s check might be returned by your bank, or you posted the payment to the wrong account. The correct way to record this is to void the payment. From the top menu of the Accounts Receivable Home Base screen select Utilities > Void Payment. Enter payment information and click the Add to Grid button. You get a message to confirm. 26

27 Add the check to the grid and click the OK button. At the Post Entries to the General Ledger screen: Be sure the Post to Period and Date of Entry fall in the same period. Verify the date of entry is the date that the check was returned on the Bank Statement. From the Payment Processing Screen correct the entry and repost or delete the entry (which places the invoice under unpaid). 27

28 The void is not complete until you correct the entry or delete the entry. 28

29 ACH processing for recurring charges The Automated Clearing House (ACH) feature is an add on product. The ACH feature allows your organization to transfer money from the customer's bank to your bank. The system prints an ACH report when the payments are processed for those recurring charges that have ACH Information recorded and creates a file to send to your financial institution for the transfer. You must first configure the ACH information for your church. From the top menu of the Accounts Receivable Home Base screen select Utilities > Set Up Information > ACH Information. Right click in the grid and select New on the ACH screen. Your bank provides all the information necessary. Set up recurring charge. The key to using ACH is having a posted open invoice for which ACH sends the matching payment through the system and creates the ACH file that is sent to your bank. You must generate the invoice and post it prior to running the ACH payment. From the top menu of the Accounts Receivable Home Base screen select Utilities > Recurring Charge Information: o Click the OK button on the Filters window. o Right click and select New in the grid. o Header tab enter the recurring charge information make sure you select the Use ACH check box. o Detail tab enter the billing information. ACH Information tab enter the customer ACH information. 29

30 Run recurring charges to generate the ACH payments. From the Recurring Charge Information screen select Utility > Transfer Recurring Charges. o Select the Transfer ACH as Invoices radio button. o Save Invoices. o Post the Invoices into history. This gives the payments you run shortly something to run against. o Run the transfer recurring charges utility again, this time selecting the Transfer ACH as Payments radio button. Enter the date or click the Pick button to select the Payment date from the calendar (appears as Effective Date on ACH verification and as Check Date in Payment Processing). "ACH" now appears in the check # field when transferring ACH recurring charges as payments. o This option only finds posted invoices. 30

31 o It creates an ACH Verification Report. o Your activity is posted. All that is left is to send the file to the bank. 31

32 Send the ACH file to your Bank. The ACH file (e.g., ARACH.TXT) is transferred to the bank by whatever method you use. The file created is located in the file location that is set up earlier. Shelby Systems v.5 does not send the file to the bank for you. 32

33 Q&A Class Discussion 33

34 Bill Ballou Shelby Training Manager Bill Ballou has been a part of the Shelby training team for over 17 years and trains on both v.5 and ShelbyNext. He greatly enjoys working with the gifted trainers on his team. Bill brings a vitality and life to training software and uses humor to help customers feel at ease with new ideas. He has helped dozens of churches find solutions to tracking financial and gifts information so they can do ministry more effectively. While Bill is known to geek out over finding a new trick in Excel or in MS Reporting Services, his real excitement comes at that moment in training when he can see that a trainee has made a key connection and has that "ah ha" moment light in the eyes. Bill worked for almost twenty years on staff at various churches, so he has an appreciation for the questions and challenges of many of our users. Training is a passion for Bill, and he loves that moment when he can see knowledge and ideas transfer to another person.