In addition to producing sales invoices, integrated computerised accounting systems will produce a range of documents and reports to assist managers and employees within a business.
When data is entered in the sales system, such as a customer order, this will update the detailed 'sales orders' listing. In an integrated system, the sales ordering system will interact with inventory management system to confirm whether the goods are available and, if not, when they are expected to be available, and this information can be communicated to the customer.
When the goods are despatched, the progress of the sales order can be updated. Upon confirmed delivery of the goods, the system will generate the sales invoice, which will be posted to the sales and trade receivables' accounts in the general ledger. There will also be simultaneous update of the receivables' ledger account for that credit customer. Additional management information, such as the progress of the sales order, the statement of account to be issued to the customer (see 6.2 below) and the aged receivables' analysis (see 6.3 below) will also be updated.
In due course, upon receipt of cash from the customer, there will be a detailed receipts listing used to update the cash at bank and trade receivables' accounts in the general ledger. There will also be update of the individual credit customer account, the individual statement of account and the aged receivables analysis.
A statement of account, often called simply a statement, sets out the transactions that a business had with a particular customer since the previous statement
A statement covers a specified period of time (eg. a month) and shows:
Remember that trade discount and early settlement discount expected to be taken by a credit customer will not be included in the statement of account as they are excluded from invoice amounts.
A statement is simply a list of the transactions on the customer's account. The information is readily available from the customer's account in the receivables ledger, where all the transactions are recorded.
There are two common reasons for producing statements and sending them to customers:
Credit customers do not always pay on time, and it may be necessary to remind them that payment is due. In many businesses, there are standard procedures for checking on overdue account balances and taking measures to persuade customers to pay.
Management also need to know how efficient the accounts department has been at collecting debts.
An aged receivables analysis is a report that is both useful for identifying late payers and for providing information about receivables and debt collection efficiency to management.
An aged receivables analysis is a report listing all the receivables of a business, how much they owe, and for how long the money has been owed. Typically, unpaid debts are analysed into amounts that have been outstanding for less than one month, for between one and two months, for between two and three months and for over three months. However, the analysis can vary from one organisation to another.
An analysis is typically presented as follows. In this example, there are just three credit customers, but in reality there could be a large number of them.
| Credit customer | Total owing $ | Outstanding for | |||
|---|---|---|---|---|---|
| Less than 30 days $ | 30-60 days $ | 60-90 days $ | More than 90 days $ | ||
| T Grainger | 551.86 | 279.30 | 272.56 | ||
| Burden & Co | |||||
| CN Lawson | 713.59 | 518.47 | 219.50 | 248.30 | 50.67 |
| Total | 1,783.92 | 498.80 | 520.86 | 329.70 | 434.56 |
If a business normally allows up to 30 days' credit to customers, it will expect most unpaid debts to be in the 'Less than 30 days' column. Most other unpaid debts should be in the 30-60 days column. However, if a business normally allows only 30 days' credit, but it has a large amount of unpaid debts in the '60-90 days' and 'More than 90 days' columns, then its credit control and debt collection procedures are probably poor and inefficient.
Other reports produced by a computerised accounting system relating to receivables include: