CHAPTER 5: CASH APPLICATION, DEDUCTIONS, AND DISPUTE MANAGEMENT
Paystand . Cloud-based global payment processing, accepting multiple currencies, and payments via card, e-check, and ACH transfers. Offers forecasting tools. Monthly fee includes unlimited transactions. Helcim. Canadian-based B2B payment processor that supports international credit card and ACH payments. Manages invoices (one-time and recurring) and ACH payments. Subscription-based with limited add-on fees.
Stax. No international payments, U.S. only. Good for large-volume businesses. Subscription and processing fees tend to be cost-effective.
DELIVERY OF PAPER CHECK PAYMENTS Informing the customer where the payment must be sent takes place either in the welcome letter and/or as directed on the invoice. When making the decision on where a check should be mailed, take into consideration the length of time it will take to receive the check via mail/post and who should receive the check first—the cash application team or the bank. For better control and quick deposit, a lockbox (see below for full description) provided by a bank is the choice of most medium and large firms. Keep in mind that some companies have many rules about check cutting, including one that checks may only be printed on a certain day of the week or month. Most medium and small businesses print checks once a week, which can delay AR’s receipt of payments by a week. If being paid by paper check, what is the fastest route that will eliminate or greatly reduce mail float and processing time (which is critical to when the cash is available in the bank)? A frequent solution is to have two or three regional lockboxes to reduce the mail time from customer to supplier. Implement the best process for your company and make sure that the welcome letter and invoice reflect the proper instructions to the customer. PROCESSING CHECKS When a check is received from a customer, it needs to be reviewed before being deposited in the bank to ensure that it has the proper information and that there are no endorsements that, by cashing the check, could legally bind your company to a new agreement. 1. Confirm that the check is made out to the company with the proper name. 2. Confirm that the numerical amount on the check matches the amount written out. If not, the bank will usually deposit the check for the written-out amount. 3. Make sure the check is dated and that there is nothing on the check, such as “This check will be considered void if not cashed within 90 days,” that would prevent the check from being cashed. 4. Confirm that the check has been signed. 5. Look for any restrictive endorsement, such a “paid in full”—do not endorse it unless your company is in agreement with the endorsement terms.
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THE ACCOUNTS RECEIVABLE SPECIALIST CERTIFICATION PROGRAM E-TEXTBOOK
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