Collecting Receivables
Collecting receivables can be separated into two activities:
• Monitoring customer activity
• Managing overdue payments
Customer activity is controlled by the credit limit you define as part of the customer setup, and can be adjusted at any stage of the customer relationship. The credit limit prevents you from creating new liabilities for this customer when the limit has been exceeded.
You use a number of utilities to monitor customer activity:
Customer Activity Dashboard displays a read-only overview of customer liabilities for the current entity or multiple entities. The information includes the customer’s credit limit details and separate invoice and payment details; it can be generated for specified periods.
The AR module also includes many different reports and views that let you review customer information using customizable selection criteria, including:
• Aging Analysis reports calculate aging for all due customer open items by the number of periods overdue at the specified date.
• Customer Open Item Report (27.17.1) lists outstanding open items on a specified date for the selected customer. Open items are grouped by type (invoice, credit note, prepayment, adjustment).
• Customer Statement of Account (27.17.19) details customer AR activity as of a specified date and lists all items that would be open as of that date.
These reports are discussed in more detail in
Accounts Receivable Reports.
When the customer is also a supplier, you can use Open Item Adjustment to net customer and supplier invoices, and to adjust the customer and supplier balances accordingly. See
Open Item Adjustment.
When AR reports indicate that payments are overdue, Reminder Letter (27.17.10) generates a series of automated reminder letters to the customer.
Contested payments are handled either by a manual correction invoice or credit note, or by marking the invoice as contested in the system.
When payment is acknowledged as overdue, the Finance Charge function calculates the charges to be applied to the overdue amounts as a finance charge invoice.