Setting Up Prior Outstanding Receivables
Outstanding receivables that are dated prior to your current fiscal year are entered as invoices for each customer through the Sales Journal. Transactions entered with dates prior to your current fiscal year do not affect ledger balances.
Outstanding receivables that are dated within your current fiscal year should be entered as new transactions through the Customer Invoices or Sales Journal windows. For more details, see Customer Transactions.
- The steps for entering prior outstanding receivables are as follows:
- Set up Customer Terms.
- Enter names and information for customers with outstanding receivables on the Customer Setup window
- Enter all outstanding receivables for each customer in the Sales Journal.
- Verify the outstanding receivables setup by checking balances on an Accounts Receivable report on the Customer Reports window.
The first two steps, setting up customer terms and customer information, are explained in Customer, Vendor & Item Setup. The following sections explain steps 3 and 4.
Entering Outstanding Receivables
Once entered, outstanding receivables appear in Customer Payments.
Before entering your outstanding receivables you should have already set up customer terms and customer information.
The total for outstanding receivables invoices that you enter with a date prior to your current fiscal year should match the beginning balance you set up for the Accounts Receivable ledger account in Account Balances.
- Click Sales Journal in the Command Center.
After the Sales Journal window opens, the cursor is in the Invoice # field.
Note: For more details about the fields on the Sales Journal window, see “Sales Journal Field Descriptions”
- Enter or edit the invoice number.
Each invoice must have a document number associated with it. Invoice numbers can contain both letters and numbers, but must end in a number and are limited to eight characters. Invoice numbers are automatically increased by one after you save the transaction.
When the cursor enters the Customer field, a pop-up list of customers appears:
If the pop-up list doesn’t appear, customers have not yet been set up. To set up customers, see Customer, Vendor & Item Setup.
- Select a customer from the list and click OK (or double-click a customer name).
The customer name and address are entered in the Customer field, and the cursor moves to the Date field.
- Enter the original invoice date.
Enter the outstanding receivable’s invoice date using the format MM/ DD/YY. For example, December 27, 2008, would be entered like this: 12/27/08. Make sure you enter a date that is prior to your company’s current fiscal year. The invoice date along with any terms selected will determine the invoice’s due date.
Note: You can enter dates in the DD/MM/YY format by selecting the “International Date Format [dd/mm/yy]” option on the Preferences window under the File menu.
- Enter a Statement Description.
Statement descriptions print on customer statements. You could enter a purchase order number or note here for reference. If you don’t enter a description, the customer name is automatically copied into this field when you save the transaction.
After you press TAB, the cursor moves to the Terms field. A pop-up list of terms appears:
If terms have not yet been set up, the cursor skips the Terms field and moves to the Ledger Account field. To set up terms, see “Customer Terms” If default terms were selected in the Customer setup window, those terms will be highlighted when this field is selected.
- Select the desired term and click OK (or double-click the desired term) or click Cancel to not enter any terms.
The cursor moves to the Ledger Account field, and a pop-up list of accounts appears:
- Select a sales account from the list and click OK (or double-click the account name).
You can type the first few characters of the account number or name to automatically select the desired account.
Since transactions that are dated prior to your current fiscal year do not affect General Ledger balances, the specific ledger account you choose really doesn’t matter. However, usually when you enter a transaction in the Sales Journal, you should choose a sales account in the 4000-4999 range.
After a ledger account is entered, the cursor moves to the Job field. Unless jobs have been set up already, the cursor skips the Job field and moves to the Description field. Even if you want to use jobs, you don’t need to set up any jobs until after your basic company setup is finished; a jobs report will not show any transactions dated prior to your current fiscal year.
- Enter a description.
If you don’t enter a description, the customer’s name will automatically be copied to this field.
- Enter the total amount of the prior outstanding invoice.
You don’t need to enter a dollar sign ($) or any zeros for .00 cents.
- Press TAB to add the line to the detail list.
Note: You should enter the total for the outstanding invoice on one detail line.
- Click Save.
- Click Yes.
After clicking Yes, the document is saved, and the invoice number is automatically increased by one.
- Repeat steps 2-12 for each outstanding receivable.
Verifying the Outstanding Receivables Setup
After entering all your outstanding receivables that are dated before your current fiscal year, you can use a Customers report to verify the setup.
- Click Customer Reports in the Command Center.
- Make sure Accounts Receivable is selected.
Don’t select any customers from the customer list. When no customers are highlighted, all the customers with outstanding invoices will be reported.
Note: If you have entered current year transactions, you should change the Cutoff Date to the prior year-end date. Otherwise, the Cutoff Date is not important.
- Click View or Print.
After clicking View, a report window appears:
- Verify that the total for the “Amount” column on the report equals the “Accounts Receivable” balance listed on the report.
Note: Customer reports are discussed in more detail in Customer, Vendor & Item Reports.
What to do if your outstanding receivables don’t balance
Several reasons could cause your outstanding receivables not to balance with the Accounts Receivable ledger balance:
- An outstanding receivable was not entered.
Solution: Enter the outstanding receivable in the Sales Journal.
- The wrong amount was entered for an outstanding receivable.
Solution: Delete the incorrect outstanding receivable by following the steps below, and then enter the correct outstanding receivable in the Sales Journal.
Deleting an incorrect outstanding receivable entry
Important : Deleting an outstanding receivable from Customer Payments in the following way will leave no record of the deletion. This procedure is used only to delete incorrect outstanding receivables that were entered with a date prior to your current fiscal year, and should not be used to delete outstanding receivables dated within or after your current fiscal year.
- Click Customer Payments in the Command Center.
- Select the appropriate outstanding receivable from the list.
- Choose the Delete button.
- Click Yes.
The outstanding receivable is deleted and removed from the list. Since the outstanding receivable did not affect any general ledger balances when it was entered (because it had a date that was prior to your company’s current fiscal year), it should not affect any general ledger balances when it is deleted.
- Accounts receivable had an incorrect starting balance.
Solution: Correct the accounts receivable balance by editing the amount on Account Balances.