LA A/R - Introduction

Introduction to Accounts Receivable

The optional Accounts Receivable module can be added in order to perform these major functions:

  1. Maintain the status of all your customers/clients;
  2. Manage revenue owed and received;
  3. Print invoices and up-to-the-minute financial reports.

The Accounting program opens in General Ledger.
Select the Accounts Receivable tab on the program's Ribbon to open the module.

Items on the Accounts Receivable tab are organized into these panels (button groups):

Data Entry – Define your customers and enter invoices and payments from this panel.

Reports – Print, preview or export information on posted entries for all or selected customers.

Utilities – Quickly update all or selected customers.

Setup – Jump to the Preferences > Accounts Receivable screen.

These additional tabs are also available:

File (same for all modules)

This tab opens the File Menu where you set Printer and Label options, and the Preferences > Accounts Receivable screen lets you define the system to fit your organization. (The Banking tab defines the checking account(s) into which deposits are made.)

System & Users (same for all modules)

These routines maintain your data bases in good order and backup or restore data files. Also, restricted routines manage user access.

Help (same for all modules)

Select Contents (F1) to quickly locate detailed information about program operations.

NOTE: The current date, fiscal year, and period appears in the title bar at the top of the window. You can change the date from the File menu or the calendar icon  on the tool bar.

See Also:

Why Accounts Receivable?

The Accounts Receivable Process

Getting Started with Accounts Receivable

 

.

Why Accounts Receivable?

Accounts Receivable refers to money owed to your organization by individuals and/or organizations for whom you provide goods and services. Accounts Receivable books exist for two major reasons:

  1. To help you receive payments from your "customers" in a timely fashion;
  2. To provide a record of those payments (i.e., customer history, etc.) so that informed decisions can be based upon them.

This AR module is designed to manage money owed to the organization, to process payments received, and to track information on customers, clients, or students.

  • Donations to your organization can be entered in the Contributions module of Logos II. (Logos II individual and/or family records can be imported into the Customer files in AR, linking the records in the two programs.)
  • Tuition/Billing data for a school can be processed here or imported from Logos School/EZ-Care2.

 

 

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The Accounts Receivable Process

This overview tells what happens in a sound Accounts Receivable system. In order to illustrate the value of your AR module, steps that are done automatically are boldfaced.

  1. You provide goods or services to someone. You submit an invoice or bill which states how much the person owes and when payment is due.
  2. You enter this information, identifying the GL Income account(s) to be updated. (You may also enter the payment, if already received.) Once you verify the accuracy of the entry, you can print the invoice (or wait and print multiple invoices later). Then go to Step 3 to finish the process at any time.
  3. Post the transactions. AR credits the GL Income accounts and makes equal debit transactions to the AR Account where it is held until payment is received. (If AR is set to Cash, posting saves the item to a file with no impact on GL accounts.)

Watch the Money Flow!

Invoice

Income Account —

(Credit -)

 

Accounts Receivable (Asset) Account —

 

(Debit +)

  1. AR "calendars" the due dateso that you can remind the customer to pay it on time. AR will manage installment payments until the obligation is paid off. It can also assess finance charges on unpaid balances, if desired.
  2. Statements show any unpaid items; Aging Reports show how long money is owed.
  3. As received, you enter payments from your customers. You also have the option to define automatic recurring credit card or electronic check payments. Once you post, AR —
  • updates the checking account, the AR account and customer records. (If set to Cash, the Income Account is credited and the Checking Account is debited.);
  • lets you print a deposit slipfor submission to your bank;
  • updates your deposit list.

Watch the Money Flow!

Enter Payments

Checking (Asset) Account —

 

(Debit +)

Accounts Receivable (Asset) Account —

(Credit -)

 

o   Two Other Ways AR Saves You Time

  1. You enter information on customers only once. From then on, you just use the customer’s name and your software gathers all the details together for you.
  2. Recurring entries (those that you receive repeatedly (rent, mortgage, loans, tuition, etc.) are only entered once, then AR takes care of the minutia.

Why Post?

Posting makes entries permanent, creating an "audit trail." By letting you first review your work and make corrections as needed, posting routines put the control of when to "lock" the transaction into your hands.

  • If you catch a mistake prior to posting, simply make the change directly to the original transaction, and then post. The reports you print then present stable information.
  • If a mistake is found after posting, a simple journal entry or "Void" routine corrects the mistake. These correcting entries are stored with your history, providing an accurate, detailed record of all your work.

 

 

 

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Getting Started with Accounts Receivable

Because Accounts Receivable links into the General Ledger, most of the preliminary work for operating the system was done when GL was defined. Follow these steps in getting off to a good start with your AR module.

Preparing Your AR System

  1. On the Preferences > GL tab, make sure the following AR-related accounts have been created in your Chart of Accounts —
  • Accounts Receivable Account(s)— (Accrual) — At least one Asset account to store AR items until you enter and post payments.
  • Checking Accounts— One or more Asset accounts into which deposits are made — usually the same account(s) from which AP and PR checks are written.
  • Sales Tax Account(s)— One or more Expense accounts from which state sales taxes are paid.
  • Finance Charge Account— If desired, create an Income account.
  1. On the Preferences > Accounts Receivable;  screen, complete the following actions —
  • Define Tax Codes — Identify the GL Expense accounts to use for sales tax costs.
  • Define AR Account(s) — (Accrual or Cash) — Identify the Asset account(s) to use.
  • Define Billing Codes — Create a list of the goods and services for which you receive revenue.
  • Create Customers — or use Import (AR Data Entry panel) or run Link to AR in Logos II Church/Donor Management to create customer records for selected family/individual records). You can also create customer records as you enter invoices
  • Optional— Identify the Income account to use for Finance Charges, the Asset account to use for Over Payments, and a "generic" Vendor record to use for customer refunds.

(Sales Representative (Sponsor) definition is also optional.)

  1. On the Preferences > Field Textscreen, you may modify or define —
  • Field Titles— For example, a school might want to change "Sales Rep" to "Sponsor" and "Contact Type" (under Customer Contact) to "Grade".
  • City Abbreviationsto aid in entering Customer addresses.
  • Combo Boxesto edit contents of various lists used throughout the module. For example, a school that changes "Contact Type" to "Grade" (above) would enter each of the grades in which students are assigned.
  1. On the AR Data Entrypanel — Recurring Invoices/Payments — enter payments that repeat on a defined cycle, such as Rent, Tuition, Loans, etc...

Operating Accounts Receivable

  1. AR Data Entry panel —
  2. Enter, edit, and post all invoices. You can choose to print (and lock) individual invoices as you enter them.

NOTE: Accrual transactions are posted to the Distribution Date.

If set to Cash, GL accounts are not updated until payments are entered and posted.

  1. Apply finance charges, if desired.
  2. Enter, edit, and post all payments.
  3. Print multiple invoices.
  4. On the AR Reports panel — Print statements showing unpaid items.

 

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