ERP Internals/Modules/Accounts Receivable
Every business sells products and/or services to its customers. Order Entry creates invoices when a customer orders something and Accounts Receivable keeps track of what payments have been made to which invoices. Commonly, it also prepares a report ("Aged Analysis") which shows how long each invoice has been outstanding. Every ERP has an Accounts Receivable module.
Collection
[edit | edit source]If Accounts Receivable invoices become overdue, Collection initiates processes to collect the money. Usually this means a telephone call followed by a series of dunning letters of increasing severity. If these efforts fail, Legal may become involved or the invoice may be written off, or sold to a collection agency for a fraction of its face value. As part of CRM, details of each contact with the customer including date, employee, contact person, and activity are stored in Customer.
Self-service
[edit | edit source]Customers can see their invoices, checks, and basic information via the web and update some portions of it (name, address, and contact information for example).
Tables
[edit | edit source]There are two major groups of tables in Accounts Receivable. The first consists of the Customer table which contains one record for every customer and the Customer Contact table which contains one record for every contact at each customer. There is at least one contact record for every customer and there can be several. The second group consists of the Invoice table which contains one record for every customer invoice and the Invoice Detail table which contains one record for every line on the customer invoice. There is at least one detail record for every invoice and there can be many.
Data Exchange
[edit | edit source]Accounts Receivable receives invoices from Order Entry/Invoicing and sends transactions to Bank Reconciliation and General Ledger.
Transactions
[edit | edit source]The first transaction records an invoice. This is done by Order Entry/Invoicing rather than Accounts Receivable.
The second transaction records a customer payment. One customer payment can pay one or more invoices. Payment can be in cash, by debit card, credit card, or check. Sometimes payments are received without information about what invoices are being paid.
The vast majority of the module's transactions consist of the above two. The third fundamental transaction is that of adjustment when things go wrong. We will document this later.