Accounts Receivables Accounting Flow

Accounts Receivables Accounting Flow

Receivables creates default accounts for revenue, receivable, freight, tax, unearned revenue, unbilled receivable, finance charges, and AutoInvoice clearing (suspense) accounts using the information specified in your AutoAccounting structure.

AR Transactions

When a regular AR invoice is entered, Receivables creates the following journal entry:

        DR Receivables

                       CR Revenue

                       CR Tax (if you charge tax)

                       CR Freight (if you charge freight)

AR Receipt

When cash is received, Receivables creates the following journal entry:

        DR Cash

                       CR Receivables

Other Scenarios for Accounts Receivables Accounting Are

Bill in Arrears

If you enter an invoice with a Bill in Arrears invoicing rule, Receivables creates the following journal entry:

In the first period of Rule:

        DR Unbilled Receivables

                       CR Revenue

In all periods of Rule, for the portion that is recognized:

        DR Receivables

                       CR Unbilled Receivables

                       CR Tax (if you charge tax)

                       CR Freight (if you charge freight)

Bill in Advance

If you enter an invoice with a Bill in Advance invoicing rule, Receivables creates the following journal entries.

In the first period of the rule:

        DR Receivables

                       CR Unearned Revenue

                       CR Tax (if you charge tax)

                       CR Freight (if you charge freight)

In all periods of the rule for the portion that is recognized.

        DR Unearned Revenue

                       CR Revenue

Accounts Receivables Credit Memos

When you credit an invoice, debit memo, or chargeback, Receivables creates the following journal entry:

        DR Revenue

        DR Tax (if you credit tax)

        DR Freight (if you credit freight)

                       CR Receivables (Credit Memo)

        DR Receivables (Credit Memo)

                       CR Receivables (Invoice)

When you credit a commitment, Receivables creates the following journal entries:

        DR Revenue

                       CR Receivables

Commitments

When you enter a deposit, Receivables creates the following journal entry:

        DR Receivables (Deposit)

                       CR Unearned Revenue

When you enter an invoice against this deposit, Receivables creates the following journal entries:

        DR Receivables (Invoice)

                       CR Revenue

                       CR Tax (if you charge tax)

                       CR Freight (if you charge freight)

        DR Unearned Revenue

                       CR Receivables (Invoice)

When you apply an invoice to a deposit, Receivables creates a receivable adjustment against the invoice. Receivables use the account information you specified in your AutoAccounting structure to create these entries.

When cash is received against this deposit, Receivables creates the following journal entry:

        DR Cash

                       CR Receivables (Deposit)

Receipts

When you enter a receipt and fully apply this receipt to an invoice, Receivables creates the following journal entry:

        DR Cash

                       CR Receivables

When you enter an unapplied receipt, Receivables creates the following journal entry:

        DR Cash

                       CR Unapplied

When you enter an unidentified receipt, Receivables creates the following journal entry:

        DR Cash

                       CR Unidentified

When you enter an on-account receipt, Receivables creates the following journal entry:

        DR Cash

                       CR On-Account

When your receipt includes a discount, Receivables creates the following journal entry:

        DR Receivables

                       CR Revenue

        DR Cash

                       CR Receivables

        DR Earned/Unearned Discount

                       CR Receivables

Receivables uses the default Cash, Unapplied, Unidentified, On-Account, Unearned, and Earned accounts that you specified in the Remittance Banks window for this receipt class.

When you enter a receipt and combine it with an on-account credit (which increases the balance of the receipt), Receivables creates the following journal entry:

        DR Cash

                       CR Unapplied Cash

To close the receivable on the credit memo and increase the unapplied cash balance, Receivables creates the following journal entry:

        DR Receivables

                       CR Unapplied Cash

When you enter a receipt and combine it with a negative adjustment, Receivables creates the following journal entries:

        DR Cash

                       CR Receivables (Invoice)

        DR Write-Off

                       CR Receivables (Invoice)

Set up a Write-Off account when defining your Receivables Activity.

When you enter a receipt and combine it with a positive adjustment, Receivables creates the following journal entries:

        DR Cash

                       CR Receivables (Invoice)

        DR Receivables (Invoice)

                       CR Write-Off

When you enter a receipt and combine it with a Chargeback, Receivables creates the following journal entries:

        DR Cash

                       CR Receivables (Invoice)

        DR Receivables (Chargeback)

                       CR Receivables (Invoice)

        DR Chargeback

                       CR Receivables (Chargeback)

Set up a Chargeback account when defining your Receivables Activity.

Accounts Receivables Auto Accounting

Accounts Receivables Auto Accounting:

Define Auto Accounting to specify how you want Receivables to determine the general ledger accounts for transactions that you enter manually or import using Auto Invoice. Receivables create default accounts for revenue, receivable, freight, tax, unearned revenue, unbilled receivable, finance charges, bills receivables accounts, and Auto Invoice clearing (suspense) accounts using this information. When you enter transactions in Receivables, you can override the default general ledger accounts that Auto Accounting creates. You can control the value that Auto Accounting assigns to each segment of your Accounting Flex field, such as Company, Division, or Account. You must define Auto Accounting before you can enter transactions in Receivables.

To define Auto Accounting:

1. Navigate to the Automatic Accounting window.

2. Enter the Type of account to define. you may Choose from the following to configure the type of Account you wish to setup the rule for

Auto Invoice Clearing: The clearing account for your imported transactions. Receivables use the clearing account to hold any difference between the specified revenue amount and the selling price times the quantity for imported invoice lines. Receivables only use the clearing account if you have enabled this feature for the invoice batch source of your imported transactions.

Bills Receivable: The bills receivable account for your transaction. Receivables use this account when you exchange transactions for bills receivable.

Factored Bills Receivable: The factored bills receivable account for your bills receivable transactions.

Freight: The freight account for your transaction.

Receivable: The receivable account for your transaction.

Remitted Bills Receivable: The remitted bills receivable account for your bills receivable transactions.

Revenue: The revenue and finance charges account for your transaction.

Tax: The tax account for your transaction.

Unbilled Receivable: The unbilled receivable account for your transaction. Receivables use this account when you use the Bill In Arrears invoicing rule. If your accounting rule recognizes revenue before your invoicing rule bills it, Receivables uses this account.

Unearned Revenue: The unearned revenue account for your transaction. Receivables use this account when you use the Bill In Advance invoicing rule. If your accounting rule recognizes revenue after your invoicing rule bills it, Receivables uses this account.

Unpaid Bills Receivable: The unpaid bills receivable account for your bills receivable transactions.

For each segment, enter either the table name or constant value that you want Receivables to use to get information. When you enter an account Type, Receivables displays all of the segment names in your Accounting Flexfield Structure. Segments include such information as Company, Product, Department, Account, and Sub–Account. Receivables let you use different table names for different accounts. Choose one of the following table names:

Bill To Site: Use the bill–to site of the transaction to determine this segment of your revenue, freight, receivable, Auto Invoice clearing, tax, unbilled receivable, and unearned revenue account.

Drawee Site: Use the site table to determine this segment of your bills receivable, factored bills receivable, and remitted bills receivable and unpaid bills receivable account.