MV Software Knowledge Bas…  Modules»Accounts Receivable»Clear A/R Accounts Mid-Month
  
Page Collections
Attributes
Hierarchy
  • RSS Feed

Last modified on 12/29/2015 2:19 PM by User.

Tags:
Clear, A/R, Accoutns, Mid-Month

Clear A/R Accounts Mid-Month

See document titled “AR Month End Procedures & Reports”.  One of the procedures in the document is: Clear Paid Inv.’s from A/R Open.  This is located in:

  • Account Receivable (Module 2)
    • System Management Functions (Task 32)
      • Clear Paid Inv.’s from A/R Open (Sub-task 4)

 

This process removes paid or zero balance items from the A/R Open Items file (Task 18) and moves them to the Cleared A/R History (Task 24). 

 

It is recommended that this procedure is done once per month after following the normal A/R month end procedures.  However, on occasion a need arises to clear paid invoices for one customer during the month.  It is also recommended to follow the procedures in the document titled “A/R Daily Balancing” before clearing the paid invoices from the A/R Open file .  Below is a simple example of why clearing paid invoices may be performed for one customer in the middle of the month and why it may be a problem:

  • Invoice #121, dated 12/10/xx for $100.00
  • Invoice #185, dated 12/25/xx for $200.00, unpaid.
  • Payment dated 01/02/xx, for $100.00 applied to invoice #121

The customer calls.  They received their statement dated 12/31/xx and it shows a balance of $300.00.  Invoice #121 for $100.00 is still outstanding on the statement.  They would like a new statement showing the invoice has been paid.  Therefore, you clear paid invoices from the A/R Open file for this customer # with a cutoff date of 01/02/xx.  Now Invoice #121 and the payment are cleared off of the account.  You send the customer a new statement showing a balance of $200.00, with only invoice #185 outstanding.  The customer is happy.

At a later date, you realize you forgot to print an A/R Aged Trial Balance (ATB) report for the end of the previous month, 12/31/xx, so one is printed with a cutoff date of 12/31/xx.  When you balanced on 12/31/xx the A/R total was $100,500.00 and the G/L A/R account also had a balance of $100,500.00 for 12/31/xx.  However, now the new A/R ATB report now has a total of $100,400.00.  This is because invoice #121, dated 12/10/xx for $100.00 is no longer in the A/R Open Items file (Task 18), and being the information in the A/R Open Items file is what appears on the trial balance, the invoice can’t be on the new A/R ATB report because the invoice was cleared off of the customer’s account..  To avoid this from occurring, please follow the steps listed below:

Before running “Clear Paid Inv.’s from A/R Open” program in the middle of the month:

  • Make sure there is an A/R ATB with detail report for the previous month.
  • Make sure the A/R daily balancing spreadsheet is up to date. 
  • Make sure the A/R daily balancing spreadsheet is balanced to the “Display Total Value of A/R Open” (2/32/1) and a current A/R ATB with detail.
  • Print an A/R ATB with detail for the customer whose account is being cleared with a current cutoff date
  • Print an A/R ATB with detail for the current month for all customers.
  • IF interfacing & obtaining A/R, daily, into the G/L (module 4), make sure the G/L A/R balance is the same as the A/R daily balancing spreadsheet. 

 

After running “Clear Paid Inv.’s from A/R Open” program in the middle of the month:

  • Print an A/R ATB with detail report for the customer cleared.  Make sure it has the same balance as before clearing.
  • Check the “Display Total Value of A/R Open” (2/32/1).  Make sure it has the same balance as before clearing.
  • Print an A/R ATB with detail report for all customers.  Make sure it has the same balance as before clearing.

 

NOTE: All of the reports recommended in this document may be printed or may be saved to a file.  Make sure you have access to one or the other.  Check with your IT person for assistance on saving reports to a file.

NOTE: The A/R (Module 2), A/R Open Items (Task 18), Erase Selected Open-Item Records (Sub-task 5), SHOULD NEVER BE USED.  The appropriate person may ask us for assistance on putting a password on this sub-task.