CHAPTER 7: ACCOUNTING, RECORDS, AND ASSOCIATED REGULATIONS
Prepare the following month-end reports: { Accounts receivable aging by customer;
{ Sales tax report (forward to the tax department for processing the monthly sales tax return). Prepare a journal entry for any credit balances that meet the escheat laws with appropriate supporting documentation. Perform month-end AR-to-general ledger reconciliation. Document “unknown” amounts to investigate. SUBSYSTEM LEDGER RECONCILIATION The accounts receivable aging report from the subsystem ledger must be reconciled to the account balance in the general ledger system. Any discrepancies must be documented and resolved before the end of the closing.
Unreconciled differences must be immediately brought to the attention of the department supervisor and/or manager. The preparer and the supervisor should initial each subsystem reconciliation.
MONTH-END MANAGEMENT REPORTING The following is a brief list of management reports that can be used by AR departments. If used, they should be printed and maintained in permanent files for the company’s recordkeeping: Accounts receivable detail aging report All reconciliations from the subsystem ledger to the general ledger Billing register by customer report Billing register by revenue category report Credit memo report Billing adjustment report
Director’s audit report Unapplied cash report Billing backlog Report Manual expense reimbursement billing report
ACCOUNT RECONCILIATIONS At the end of the month, accounts receivable or billing ledgers need to be reconciled with the accounts receivable control account. The control account is the total accounts receivable balance from your general ledger. The beginning accounts receivable balance, plus new sales invoiced during the month, minus payments made by customers during the month, should equal the ending accounts receivable total. This needs to be reconciled to the sum of the individual accounts receivable ledgers. In other words, the total outstanding accounts receivable account balance should be the sum of all the outstanding customer balances. This will help to uncover any errors made in recording receivables or applying cash payments.
An accounts receivable aging report is a good tool to help you review outstanding receivables on an ongoing basis.
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THE ACCOUNTS RECEIVABLE SPECIALIST CERTIFICATION PROGRAM E-TEXTBOOK
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