SAMPLE ACCOUNTS RECEIVABLE. Policies & Procedures FOR. Version Edited By Edited Dates Comments 1.0 Irene Bushnell November 2015 Baseline

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1 ACCOUNTS RECEIVABLE Policies & Procedures FOR Version Edited By Edited Dates Comments 1.0 Irene Bushnell November 2015 Baseline Intacct AR Policies & Procedures October Synergy Business Solutions. All rights reserved

2 Last Revision: October 2015 The forms and policies presented in this manual may not be the most current available. Please consult Synergy Business Solutions at for the most up-to-date information. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that Synergy Business Solutions is not engaged in rendering legal, accounting or other professional services. If legal advice, accounting advice, or other professional or expert assistance is required, you should seek the services of an independent professional person. The material contained in this publication is for educational purposes only and it is not intended to be a substitute for the legal research or other work product a professional would normally perform for a client. While all materials are carefully researched, no warranty, express or implied, is offered as to accuracy. Questions regarding the acceptability or likely effects of implementation of certain procedures in particular practice contexts should be reviewed on a case-by-case basis. Technical guidance provided herein should be read in addition to the related technical literature cited, not instead of it. This document may contain technical inaccuracies or typographical errors. Any documentation with respect to Intacct Software products is provided for informational purposes only and does not extend or modify the limited warranty extended to the licensee of Intacct software products. Disclaimer of All Other Warranties Except as expressly provided herein, Intacct disclaims all warranties with respect to the Intacct services, system, and documentation, whether express or implied, including without limitation any implied warranty of merchantability, fitness for a particular purpose, and noninfringement. Partner acknowledges and agrees that neither Intacct nor any system, services, documentation, data, or materials provided by Intacct will be construed as providing accounting, taxation, financial, investment, legal, or other advice to partner, customers, end users, or any third party. Each party will be solely and individually responsible to comply with all laws and regulations relating to its respective business operations. Trademark Acknowledgments Intacct and Intacct Software are registered trademarks of Intacct Corporation. Windows, Word, Excel and Visual Basic are registered trademarks of Microsoft Corporation. All other products mentioned are trademarks of their respective manufacturers. The contents of this publication have not been prepared, reviewed, or approved by the owners of the trademarks referenced above. You agree not to reproduce, duplicate, copy, sell, resell, distribute to others outside of your organization, or exploit any portion of this Product without express written permission by us. Printed in the United States of America. Copyright Synergy Business Solutions All rights reserved. Intacct AR Policies & Procedures October Synergy Business Solutions. All rights reserved

3 TABLE OF CONTENTS HOW TO USE THIS MANUAL... 1 First Time Customizations... 1 Modifying Manual Content... 2 ACCOUNTS RECEIVABLE CONFIGURATION POLICIES... 3 Accounting settings... 3 Dimension setup... 4 Document sequencing... 4 Aging... 4 POLICIES FOR MANAGING ACCOUNTS RECEIVABLE... 5 Cash Receipt Policies... 5 Customer Types... 5 Customer Groups... 5 AR Terms... 5 Customer Management Policies... 6 Invoice and Adjustment Entry Policies... 6 Collection Policies... 7 Reversing Posted Payment Policies... 7 CLOSING AR SUBLEDGER POLICIES... 8 Open and Closed Subledger Policies... 8 Procedures for Closing the AR Subledger... 8 Procedures for Reopening the AR Subledger ACCOUNTS RECEIVABLE AUDIT TRAIL AR Binder Reports Distributed Reports AR Documents Naming Convention MANAGING CUSTOMERS Procedures for Adding New Customers Customer Information Screen Customer Tab Additional Information Tab Contact List Tab Restrictions Tab Procedures for Editing Customers Procedures for Making Customers Inactive MANAGING INVOICES AND AR ADJUSTMENTS Intacct AR Policies & Procedures October Synergy Business Solutions. All rights reserved

4 Procedures for Generating Invoices Invoice Screen Header Information Entries Customize Allocation Procedures for ing and Printing Completed Invoices Procedures for Reversing Invoices Procedures for Processing AR Adjustments AR Adjustment Screen Quick Invoice Entry Procedures for Quick Invoice Entry Quick Invoice Entry Preferences Screen Quick Invoice Entry Screen ENTERING AND MANAGING RECURRING INVOICES Overview Procedures for Entering Recurring Invoices Recurring Invoice Screen Invoice Tab Additional Info Tab Payment Tab Schedule Tab CUSTOMER ADVANCES Procedures for Recording Advances Payment Summary Information Screen Receive Advances Screen RECORDING CUSTOMER PAYMENTS Procedures for Processing Check Payments Procedures for Processing ACH Payments Select Invoices for Payment Screen Deposits Screen Procedures for Processing Refunds and Overpayments RECORDING MANUAL DEPOSITS Procedures for Recording Manual Deposits Manual Deposit Screen REVERSING POSTED PAYMENTS Procedures for Reversing Undeposited Posted Payments REVENUE RECOGNITION PROCEDURES Procedures for Posting Revenue Schedules CUSTOMER STATEMENTS Procedures for Processing Statements Intacct AR Policies & Procedures October Synergy Business Solutions. All rights reserved.

5 MONTH END PROCESSING AR Month End Procedures MONTHLY AR PROCEDURES CHECKLIST Intacct AR Policies & Procedures October Synergy Business Solutions. All rights reserved

6 Customer Management Policies BSC has put in place processes and policies to help ensure the integrity of the customers list in Intacct. The processes will help ensure the list is manageable and contains valid customers. New Customers New customers are approved by sales managers as part of the sales process. Following are BSC policies for setting up new Customers in Intacct. The New Customer form will be completed and attached in their Customer Information screen. This form identifies their term, discount if applicable, credit limit and other relevant customer information. Detailed procedures for adding new customers are outlined in this manual under Procedures for Adding New Customers. Invoice and Adjustment Entry Policies Invoices are entered into Intacct daily. Once the invoices are created, they are reviewed and then sent to customers. Invoices for services are sent every Monday for the prior week. Monthly rental invoices are generated and sent by the 25 th of the month for the upcoming month. There are three distinct processes for how invoices get created at BSC. 1. Project managers generate an invoice for a project via the Projects module. 2. An invoice is created via a recurring invoice template in the system. 3. The Accounts Receivable clerk enters an invoice. BSC books are normally be closed by the 10 th of the month. Any invoices relating to the prior month after closing will be posted to the current month unless they will affect net income by more than $5,000. In this case, the Controller should be notified for a decision as to whether to create the entry in the prior or current month. The Controller will make a reversing GL accrual entry for the expense if the period is not to be reopened. Reversing Invoices BSC has checked the feature Enable reversal of unpaid invoices in the Accounts Receivable Configuration screen which turns off the ability to delete invoices. If an invoice is entered inadvertently, it will need to be reversed. Only the Controller, Accounting Manager, and Accounts Receivable Manager will have access rights to reverse an AR invoice. Intacct AR Policies & Procedures October Synergy Business Solutions. All rights reserved. Page 6

7 Closing AR Subledger Policies BSC utilizes Intacct s closing subledger feature to assist with our internal control process. Closing the AR subledger prevents users from posting transactions to the wrong period and enables our organization to finalize financial statements in a timely manner. Open and Closed Subledger Policies Following are internal control guidelines for how BSC uses subledger periods in the AR module. 1. Only the Controller and AR Manager roles will have access to the Open and Close AR Subledger screens. 2. Subledger periods will normally be closed by the 5 th working day of the month for the previous period. 3. Any entries that relate to the prior month after closing will be posted to the current period unless they affect net income by more than $5,000. In this case, the Controller should be notified for a decision as to how it should be entered. The Controller may decide to do an Accounts Receivable accrual journal entry rather than reopening a period. 4. Subledgers will not generally be reopened once they are closed unless there are unforeseen circumstances that justify reopening the subledger. The Controller and AR Manager must agree that it is in the best interest of the company to reopen a period that has been closed. Note: It may be determined that a single summary needs reopened rather than the entire subledger. Procedures for Closing the AR Subledger The following procedures outline the steps to be followed for closing the AR Subledger in Intacct. Ensure all steps in Month End Processing at the end of this manual have been completed. Use the Close AR Subledger screen and enter in the information to close the appropriate period. Select Accounts Receivable > Manage Subledger > Close Subledger. Select the period to be closed in the To the end of period field and select Close to being processing. Intacct AR Policies & Procedures October Synergy Business Solutions. All rights reserved. Page 8

8 Accounts Receivable Audit Trail BSC has taken several steps to ensure procedures and process are in place for maintaining a proper audit trail. One of the processes that is critical to the completeness of an audit trail is maintaining an Accounts Receivable binder, whether it is printed or paperless. BSC uses a paperless workflow therefore a folder has been created called AR Binder in the attachment folders of the Company module. Outlined below is BSC s internal process as to the proper filing of accounts receivable reports to help ensure a successful audit trail in the AR process. AR Binder Reports At a minimum, the following reports will be printed and included in the AR Binder as part of BSC s internal controls and month end closing checklist for AR. These reports are identified throughout this manual as to when they are filed in the binder. AR Binder Distributed Reports Sales Register Receipts Register AR Aging Report AR Ledger General Ledger AR accounts Reclassification Report The following outlines the title and distribution frequency of reports that will be generated and distributed from Intacct as part of our internal control and audit trail process. A printed copy of each report will be filed in the AR Binder. Note: These reports are memorized and scheduled to automatically. Report Name Frequency Recipients AR Ledger Monthly CFO Monthly Receipts Register Controller Monthly Sales Register Customer Aging Report Monthly Controller AR Manager Customers Created-Modified (Custom Report) Quarterly Controller AR Manager AR Documents Naming Convention BSC has created a folder in the Attachments Folders screen called AR Binder. All reports noted above will be saved electronically in this folder. Documents will use the following naming convention: YYYYMMDDReportName (e.g ReceiptRegister) Intacct AR Policies & Procedures October Synergy Business Solutions. All rights reserved. Page 10

9 CUSTOMER ADVANCES Customer Advances The Receive Advances screen is used to post an advance or TIP! Advances show on prepayment from a customer. An invoice can be created at a later the AP Ledger report as time and then you can apply the advance to the customer invoice. payments. When you are recording an advance, you are essentially recording a payment. Therefore the payment advance must be included in a Payment Summary so that it can be included in a deposit. BSC uses a separate Payment Summary for advance checks.. Note! Advances will be available to apply against invoices in the Receive a Payment screen. Procedures for Recording Advances Gather the check or ACH documentation for recording the advance. Create the Payment Summary for the advances or prepayments. Refer to Payment Summary Information Screen for detailed information. Record the advance by clicking on the plus sign next to Advances under the Accounts Receivable module. Note! At the time this manual was written you could not add an Advance from the Advances list view. Complete the Receive Advances screen. Use the Payment Summary created for the advance. Refer to Receive Advances Screen for detailed information. Save the advance documentation in the AR Binder attachment folder. Follow BSC s naming convention YYYYMMDDAdvanceCustomerIDName. Note! At the time this manual was written you could not add attachments to an advance. Intacct AR Policies & Procedures October Synergy Business Solutions. All rights reserved. Page 31

10 Recording Customer Payments Payments are recorded daily in Intacct. Per the Cash Management Policies and Procedures manual, customer payments are endorsed and then given to the Accounts Receivable Assistant for entering in Intacct. ACH payments are entered daily using the online deposit report. Procedures for Processing Check Payments Gather the check payments and ensure they are endorsed. If a check is not endorsed, have the Office Manager endorse it with BSC s bank endorsement stamp. Access the Select Invoices for Payment screen. Accounts Receivable > Activities > Receive a Payment. Enter each check payment received. For specific information related to entering payments refer to Select Invoices for Payment Screen on the following page. Once all payments have been entered, calculate the total amount of the checks on hand. Make note of the total amount. Generate the Receipts Register report. Check the Undeposited Receipts only checkbox in the Filters section. Verify the total on the report balances with the calculated total amount of checks on hand. If the amounts don t match, reconcile any differences before proceeding. Print the final Receipts Register report and save it following BSC s naming convention YYYYMMDDReceiptRegister. This report will be used as an attachment for the deposit when it is entered. Complete a deposit slip. Make a copy of the deposit slip and checks. Scan the copy as it will be used as an attachment to the deposit in Intacct. Follow BSC s naming convention YYYYMMDDBankDeposit. Access the Deposits screen and create the deposit. Refer to Deposits Screen for detailed information for the screen. Select the checks to be deposited that match the checks on hand. Ensure the total in the screen matches the total calculated and Save the deposit. From the Deposits list view, print the Deposit Slip report. Save the printed copy in the CM Binder folder following BSC s naming convention YYYYMMDDDepositSlipReport. Give the completed deposit slip and checks to the Office Manager per the Cash Management Policies & Procedures manual. If there was an overpayment during the process of recording payments, refer to Procedures for Processing Refunds and Overpayments to complete processing of the overpayment. Intacct AR Policies & Procedures October Synergy Business Solutions. All rights reserved. Page 34

11 Recording Manual Deposits Manual Deposits are used to record a payment from a customer when there is no invoice in the system. The manual Deposit process will create the invoice at the same time as recording the deposit. The deposit and invoice will have the same General Ledger posting date. Occasionally BSC may have a need to record a manual deposit but it is rare. Because BSC uses an Undeposited funds account for making deposits, all checks will be entered with the Receive a Payment process. An invoice will be entered and the check applied to the invoice. For an online ACH payment, there may be a need to use the Manual Deposit screen. Please consult with the Accounting Manager before using this screen. Procedures for Recording Manual Deposits Gather the payment documentation (e.g. online ACH payment) that authorizes the manual deposit. Access the Manual Deposit screen from the Accounts Receivable module. Accounts Receivable > Transactions > Manual Deposits. Complete the screen with the deposit information. Refer to Manual Deposit Screen for specific field information. Attach a copy of the authorized documentation for the manual deposit in the Attachments field. Follow BSC s naming convention YYYYMMDDManualDeposit. Complete the Entries portion of the screen with the appropriate account and dimension information. This is the information that will be included on the invoice. Save the transaction. TIP! You cannot post manual deposit to an Undeposited funds account. Intacct AR Policies & Procedures October Synergy Business Solutions. All rights reserved. Page 40

12 MONTH END PROCESSING Month End Processing The following procedures outline the steps for closing the Accounts Receivable module for the period. The month end procedures are generally done by the 10 th of the month. Note: These steps are also outlined in summary in the Monthly AR Procedures Checklist on the following page. The checklist is printed each year and kept in the AR Binder attachment folder so that each month it can be signed and dated as each of the steps are completed. AR Month End Procedures Completed by the Accounts Receivable Assistant. Verify all accounts receivable transactions for the month have been completed and posted. Run the custom view Invoices on Draft Status to see if any invoices are in a draft state that should be posted prior to closing. Complete and post any transactions that arise from the above review. Verify all Recurring Invoices have been generated and posted for the month. Print the AR Aging and AR Ledger reports using the GL Posting Date option. Confirm the two reports are in balance. If not, identify and correct any discrepancies. Print the General Ledger report, detail format for the month for the AR ledger account. Compare the aging and ledger report balances to the general ledger report to ensure the balances are the same. If not, identify and correct any discrepancies. The Aging report is your support for the AR balance in the general ledger. Use the general ledger report to see if any transactions were made to the accounts receivable account from the general ledger rather than through the accounts receivable module. Compare beginning balances for the period to last period s ending balances to ensure no entries were made to prior periods. Enter and post any transactions that arise from the above review. Reprint the reports once they are accurate and in balance. TIP! If a customer is inactive they are not included in the AR Ledger. File the final AR Ledger, AR Aging and General Ledger reports in the AR Binder attachment folder. Follow BSC s naming convention YYYYMMDDReportName (e.g APLedger). Intacct AR Policies & Procedures October Synergy Business Solutions. All rights reserved. Page 45

13 ACCOUNTS RECEIVABLE MONTHLY AR PROCEDURES CHECKLIST Monthly AR Procedures Checklist Completed by Accounts Receivable Assistant Verify all transactions in AR have been completed and posted. Review the following custom Invoice list view: Invoices on Draft Status Complete and post any transactions that arise from the above review. Verify all Recurring Invoices have been generated and posted for the month. Print the AR Aging and AR Ledger reports using the GL Posting Date option. Confirm the two reports are in balance. If balances do not match, identify and resolve any discrepancies. Print the General Ledger report, detail format for the month for the AR ledger account. Compare AR Aging and GL report to ensure they balance. Enter and post any transactions that arise from the above review. Print and review the AR Aging, AR Ledger, and GL reports until they are accurate. File the reports in the AR Binder attachment folder. Period PREPARED BY: PAGE 47