OpenPro Application Guide Accounts Receivables (AR)
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=====Chapter 1: Understanding Accounts Receivable=====
====Introduction====
This chapter provides the background to understand this package. Basic terms are defined and the interface to other optional OpenPro.com packages is described.
====Keywords and concepts====
===Accounting===
is the methodical collection, systematic categorization, and
organized presentation of financial records.
===Account Inquiry===
An function enables you to view all items for a selected customer.
===Accounts Receivable===
(A/R) records customer sales and anticipated revenue. It
tracks all customers, purchases, payments and outstanding balances.
===Aging===
is the time elapsed after the billing date or due date. You may select to
age either by due date or by Invoice date. Four aging periods are available in A/R, normally structured as:
* Current
* 31-60 days
* 61-90 days
* Over 90 days
You may use these aging periods, or define your own.
When aging is done by invoice date, a document becomes one day old on the first day after the invoice is posted. An invoice written and posted on January 1 would be 30 days old on January 31, regardless of the due date.
When aging is done by due date, a document becomes one day old on the first day after the due date. An invoice due for payment on January 1 would be 30 days old on January 31, regardless of the invoice date.
===A/R Import Assist===
The function (under the “Assist Import” menu) enables you to set up the A/R Open Item File to match your records when you begin using this module.
===A/R Open Item File===
The is a permanent file into which transactions (sales and cash receipts) are posted. This file contains every sale, debit memo, credit memo, cash receipt, and finance charge that has not been purged. It holds the complete, itemized, current record for all customer accounts.
===Cash Receipts===
This module contains functions that allow the entering, editing and posting of . To help you apply payments to open items, you can print a Cash Application Worksheet. This lists all open items for specified customers, showing current balances due and the valid discount amounts.
You can automatically apply cash for an open item customer. This enables you to pay the oldest outstanding invoice first. You can also apply such payments to a specific invoice.
A Cash Receipts Edit List is available to help you in the editing procedure. On request, the module posts cash receipts to the A/R Open Item file. You may also prepare deposits, print deposit slips, and deposit summaries.
===Commissions===
The system tracks due to sales representatives and can print a Commissions Due Report on request. Commissions may be based on either booked invoices or fully paid invoices.
===Cost Center===
A is a segment of a company (for instance, a department or a regional office) for which sales and/or expenses (and sometimes costs) can be calculated separately from the total sales and expenses of the entire company. A typical use for tracking sales by cost center is for a company that has several sales offices. By making each sales office a cost center, you can separately track the sales performance of each office.
===Customer Accounts===
The __open item__ and __balance forward__ methods are two generally accepted methods of tracking . OpenPro.com A/R enables you to use both of these methods:
===Open Item Method===
The method enables you to apply each cash receipt (payment you receive) or credit memo to one or more specific sales (invoices), debit memos, or finance charges. You can partially pay or skip specific items, applying payments to later items.
With the open item method, every transaction made against a customer’s account is kept on disk until you decide to remove the matching debits and credits.
The total balance due is calculated for an open item customer. The ability to look at older, partially paid invoices from previous months can be helpful, especially for highly active customers who pay by specific invoice number.
===Balance Forward Method===
Accounting provides for the summarizing of items into a single balance brought forward amount. When a payment is received from a balance forward customer, that payment is always applied to the oldest unpaid item(s).
This method is useful for customers who only buy occasionally and whose accounts usually contain only a few transactions.
===Customer File===
OpenPro.com Accounts Receivable contains options for interactive maintenance of the , including entering, changing, and deleting. In addition to the name and address, this file contains information on a customer’s last payment, account balance and sales volume. Several codes are provided which enable you to tailor the handling of customers individually.
Customers can be set up as a miscellaneous type in the Customer file, so that you can enter sales or cash receipts for one time customers without first having to put the customer’s full name and address on file.
Customer lists and labels can be printed either numerically or alphabetically.
===Customer History===
You can view or print a report showing fully paid A/R open items and their matching payments after they have been purged from the A/R Open Item file.
===Data Organization===
Most of the information you enter into your computer is stored on disk. In order for computer programs to locate specific pieces of data (within large masses of data), data must be organized in some predictable way. OpenPro.com accounting software organizes your data for you automatically as it stores it on your disk. The following are terms that are associated with the structure of data:
===Character===
A is any letter, number or other symbol you can type on your keyboard.
===Data File===
A is a group of one or more related records. A data file is often referred to simply as a .
The Customer file in Accounts Receivable is an example of a data file. Such a file is made up of several records, each of which contains the name, address, etc. for each customer.
Each file is kept separate from other files on the disk. There are other types of files in addition to data files. Programs are stored on the disk as program files. However, references to files in this user manual mean data files unless specifically stated otherwise.
===Entry===
A record in a data file is often referred to as an .
===Field===
A is a group of one or more contiguous characters representing a single piece of data. For example, a name, a date and a dollar amount are all fields.
* **Alphanumeric** fields may contain any characters: letters of the alphabet, numerals (numbers), special symbols (*, &, $, etc.), or any combination of all three.
* **Numeric Fields** may contain only the digits from 0 through 9 and, in some cases, the minus sign and the decimal.
* **Date** fields contain calendar dates, entered as MM/DD/YYYY.
===Record===
A is a group of one or more related fields. For example, the fields representing a customer’s name, address and account balance might be grouped together into a record called the customer record.
===Debit and Credit===
The terms and refer to the types of transactions that must be recorded in G/L accounts to accurately reflect the activity occurring in all accounting areas. Refer to the Glossary in the Installation and System Guide for definitions of debit and credit.
In A/R, a debit memo issued by you to a customer increases what that customer owes you, and a credit memo decreases what is owed. Debit does not always mean an increase in an account and credit does not always mean a decrease in an account. In some accounting areas, a debit increases a G/L account and a credit decreases a G/L account. In other areas, a debit decreases, and a credit increases, a G/L account.
===Finance Charges===
The system will automatically calculate finance charges based on parameters that you define in Rules setup AR Finance Charge. You can then edit and post them as you wish. A Finance Charges Edit List assists in this process. You can also manually enter finance charges through the Miscellaneous Charges function.
Control information parameters include the following:
* Two different percentages and associated dollar amount levels
* Invoice aging method (by invoice date or due date)
* Number of days an invoice must be past due before finance charges apply
* Minimum finance charge amount
* Whether finance charges are calculated on previous finance charges
A Finance Charges Journal is automatically printed when finance charges are posted.
===File Recovery Procedure===
This function provides the capacity to recover corrupted data files. You can also use it to convert important data files to a format which can be interfaced to commonly used data base and word processing packages.
===General Ledger===
When a company makes sales and receives payments, this activity affects not only Accounts Receivable (A/R), but also the area of accounting called (G/L).
General ledger is the area of accounting where all accounting records are brought together to be classified and summarized. Financial statements are printed based on this data.
===General Ledger Account===
A is a specific category under which all financial activity of a certain kind is classified. For example, you might have a General Ledger account called “telephone expenses”, under which you categorized your telephone bills.
Typically, an independent business has a hundred or more G/L accounts. In the OpenPro.com accounting module, each time any financial activity occurs in any area, the dollar amount is recorded under the appropriate G/L account.
Refer to the “Reformat Account Number” chapter in the Installation and System Guide (ISG) for complete information on General Ledger Account Numbers.
===Help===
refers to descriptions of functions that appear on the screen by pressing a designated key (HELP) on top right of screen in the black scroll bar. The Help text gives you a quick reference to the highlights of functions while you are running the application.
===Mini-find===
or popups refer to a list of available entries for a particular field. Many fields allow you to press a designated key to show all available data on file. For instance, when entering an invoice you may press this key at the Sales Representative field to bring up a list of all sales representatives on file. Selecting an entry from this list is often easier and faster than remembering the sales representative codes or searching through all possible entries until the right one is reached.
===Interfaces to other OpenPro Modules===
You can interface Accounts Receivable (A/R) to other OpenPro.com modules, either at the time of installation or later. The table below summarizes the possible connections and the advantages of each. All of these interfaces are optional.
//**OpenPro Modules That May Interface to Accounts Receivable**//
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**Module**\\
O/E Order Entry\\
POS Point of Sale\\
Ecomm Ecommerce cart
**What it does**\\
Handles back orders, quotations, and picking tickets.\\
NOTE: O/E can be interfaced without I/C if desired.
**Why interface to it?**\\
* Quotations can be converted to orders
* Orders can be converted to invoices
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**Module**\\
G/L General Ledger
**What it does**\\
Handles the primary accounting functions of your business.
**Why interface to it?**\\
* Sales and cash received automatically distributed to correct account
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**Module**\\
C/R Check Reconciliation
**What it does**\\
Maintain bank account information from several packages.
**Why interface to it?**\\
* Reconciles the checkbook for deposit information
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**Module**\\
J/C Job Cost
**What it does**\\
Maintains records on work in process.
**Why interface to it?**\\
* Assure that credit is recorded on jobs for billings
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**Module**\\
S/A Sales Analysis
**What it does**\\
Provides management reports showing sales performance in various categories.
**Why interface to it?**\\
Detect trends for goods and services by:
* Customer and customer type
* Sales representative
* Zip code
* Sales volume
* Item and item categories if I/C is also interfaced
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The above chart is not a complete list of OpenPro.com products, only of those that may be linked to A/R.
You may also run several OpenPro.com modules without interfacing them to one another. For instance, some users use I/C primarily to control kit assembly and A/R to handle their invoicing without linking them together. They forego the advantage of driving their inventory control from their invoices, but they also avoid the need to run O/E.
===Miscellaneous Charges===
is a selection that enables you to interactively enter, edit, and post miscellaneous charges (sales, finance charges, credit/debit memos). When you enter miscellaneous charges, you may distribute miscellaneous charges and freight charges to various G/L accounts.
===Multi-Company===
refers to the capability to do accounting functions for multiple companies with the same set of software.
===Open Item===
In Accounts Receivable, this term is used in two ways:
* An is any invoice, finance charge, or debit memo that has not been fully paid; or any cash receipt (payment) or credit memo that has not been fully applied to pay invoices, finance charges, or debit memos.
* An is a customer whose payments apply to particular invoices, finance charges, or debit memos. Statements for open item customers may show all open invoices, finance charges, and debit memos, regardless of the accounting period in which they originated.
===Password Protection===
You may specify that passwords are required. A is a unique code you assign to each individual using your OpenPro.com software. In order to use a protected function when passwords are required, each potential user must first enter a valid password.
===Post===
To is to take transactions from a temporary file and move them to a permanent file (where other transactions probably already exist). For example, in A/R invoices are initially entered into a temporary transaction file. After they have been entered and edited, they are posted to the more permanent A/R Open Item file.
===Recurring Bills or Templates===
or are sales that recur at a regular time interval. Examples are rent collected from tenants, loan repayment amounts, and regular monthly service charges.
These sales need to be entered as sales only once. Then, they can be selected periodically and turned into invoices.
===Sale (Sales Transaction)===
A or is a computer record of an invoice, finance charge, debit memo, or credit memo. Refer to the “Data Organization” section in this chapter for the definition of record.
===Sales Analysis===
This Accounts Receivable module generates sales history information that may be used by the OpenPro.com Sales Analysis module.
===SPOOL===
is a computer acronym meaning send printer output off-line. Spooling is a process that generates a report to be printed at a later time. Instead of reports going directly to a printer, they are saved as a disk file. When directed, some saved reports can be printed in one long run (for example, overnight).
===Statements===
You assign a cycle to each customer in the customer record.
Statement cycles are used in one of the following ways:
* To designate the statement frequency, such as weekly, semi-monthly, monthly, quarterly, etc.
* To designate the statement processing batch, such as the 10th, 20th, or 30th of the month.
You can print statements for designated cycle[s] on request.
===Transaction===
As used in accounting, a is a business occurrence involving money and goods or services. For example, a transaction occurs each time you gas up your car. You pay money in exchange for goods (gasoline).
In OpenPro.com software, is the record of a completed business occurrence involving money and goods or services.
The records of sales made and payments received are examples of transactions from the area of accounting called Accounts Receivable. The records of purchases and the payments you make for such purchases are transactions from the accounting area called Accounts Payable. The records of quantities of goods received or exported are transactions from the area of accounting called Inventory Control.
====Features for OpenPro Accounts Receivable====
The OpenPro.com Accounts Receivable module provides the following features:
* Open item customers, as well as balance forward customers.
* Maintenance of the sales representatives, customer files, tax codes, and other similar items. Lists of these items are also provided.
* Miscellaneous charges entered, edited and posted using edit list and journal.
* Templates or Recurring bills entered, edited and selected to later turn into invoices.
* Invoices entered, edited and posted with edit list and journal.
* Quick pasting of standard bills (lists of standard services and/or goods) into invoices.
* Cash receipts entered, edited and posted with edit list and journal.
* Payment terms based on days or day of the next month (proximo).
* Account aging based on days or day of the next month (proximo).
* Aging reports and collection reports printed in two different formats.
* Cash projection reports.
* On line customer account inquiry.
* Fully paid item viewing and reporting. An optional Customer History file enables viewing or reporting of items purged from the Open Item file.
* Storage of reports on disk for printing later at your convenience.
* Multiple printer selection.
* Automatic calculation and posting of finance charges, with edit list and journal.
* Unlimited number of A/R accounts and cash accounts.
* Control of sales commissions due and commissions due report printing.
* Commissions due calculation by either booked invoices or fully paid invoices.
* Commission percentage based on either customer or sales data.
* A/R distributions to the G/L printed reports.
* Deposit preparation.
* Deposit slips and deposit summary printing.
* Cash history report printing
* Optional interface to OpenPro.com General Ledger (G/L), Job Cost (J/C), Order Entry (O/E), POS point of sale, and Sales Analysis systems.
* Optional interface to OpenPro.com Check Reconciliation (C/R), which reconciles the checkbook into customer payments deposit categories.
* Password protection, data file integrity checking, and backup/restore facilities.
* Selectable multi level menu or menu bar from which you can quickly access other functions and modules.
* A Miscellaneous Charges Edit List, which helps in the editing process, available upon request.
* User designed invoice formats. As many as 99 formats may be used.
* Displays of up to 10 description lines per services line item, plus an unlimited notes display for any invoice. These notes exist for internal use only. This does not require that the user adopt some pre-defined format for a given invoice.
* On demand invoice printing and re printing (in the point-of-sale mode).
* Invoice history.
* Cash receipts created simultaneously with invoices.
* Customer credit checking on invoices.
* Ten optional user defined fields that also print on invoices.
* Item drop shipping directly from supplier to customer.
* Multiple User defined statement formats.
* Additional information maintained for each customer record including current balance, past due amount, first sale date, last invoice number, and last returned check amount and date.
* Activity trend history for each customer for up to thirteen prior periods, including average days to pay, highest balance, total charges, total payments received.
* Calculate sales taxes using the tax-on-tax method, including Canadian GST and PST.
* Sales tax processing, up to five tax rates per jurisdiction.
* Automatic check handling for checks returned for reasons such as non-sufficient funds (NSF).
* Everything is web enabled, and online real-time processing for cash receipts, finance charges, invoices, miscellaneous charges, recurring bills and returned checks.
* An added on-credit-hold flag for individual customers with overdue accounts.
* Added shipping zone, sales territory and Standard Industry Code (SIC) features, which support third party products, and freight calculations.
* Enhanced Collections Report and View Customer Account that shows current and past due balance, first and last sale date, and last payment date and amount.
* Three new users defined fields for each customer. These fields appear when entering an invoice or order.
* Sales tax entry for individual line items.
* Reprinting of invoices, which have already been printed and posted.
* Forward and backward scrolling when displaying reports.
* Include an unlimited number of contacts for each customer.
===Upgrading from Earlier Versions===
We have included the necessary functions and instructions to enable you to upgrade from an earlier version of this same OpenPro.com module. Please refer to the Installation and System Guide for more information.
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~~socialite~~