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The RECEIVABLES Module Beyond Basics Slideshow 2B.

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Presentation on theme: "The RECEIVABLES Module Beyond Basics Slideshow 2B."— Presentation transcript:

1 The RECEIVABLES Module Beyond Basics Slideshow 2B

2 Contents Sage 50 Accounting Tools –Tracking Additional Transaction Details 3 –The Calculator 4 Journalizing Deposit 5 Applying a Deposit 6 Journalizing Cash Sales 8 Journalizing Credit Card Sales 9 Journalizing Customer’s NSF Cheque 10 Journalizing Customer Account Write-Off 12 Journalizing Owner Investment 13 Customer Statements 14 Period-End Reports 15 Contents Slideshow 2B

3 Sage 50 Accounting Tools: Tracking Additional Transaction Details When entering journal transactions such as purchases, sales or paycheques, you can store additional pieces of information. In this example, Havanah Leather Goods’ cheque was received 1 day late for a discount. G. Morgan, the Accounting Manager approved an extension of the discount period. You might want to note his name for this special transactions. To use the Additional Information, click the button with arrow pointing. Click the Additional Information button at the right now (see arrow top right). … you can enter the information related to the current transaction. The information will not show on the journal where you enter the transaction, but will display when you view the journal entry. Click to see the additional information on the journal entry window. Click to continue.

4 Sage 50 Accounting Tools: The Calculator When you wish to calculate something while processing transactions, you can use the Calculator icon on the Toolbar. For example, if you wish to calculate the shipping charges on an invoice which is 8% of the repairs charges, you would click in the appropriate column Click the AMOUNT column (see arrow) … then click the Calculator button. Click the Calculator button now. You can then click on the numbers and symbols to do the calculation, just as on a calculator. The result will show on the window (see arrow). Click to continue. Calculator button Jan 31, 2016

5 Journalizing Deposit A seller may require a regular customer to make a partial payment for a special (custom-made or non- returnable) order or a large order. Sellers may ask for an advanced payment (deposit) for an order from a customer who has not yet established credit. In Sage 50 Accounting, a deposit is entered as a sales order. Click. As soon as you select Cheque for Payment Method, boxes that refer to the Deposit appear, and you will be able to enter the deposit along with the details for the order. Remember, you would click RECORD (instead of POST) for a sales order. Click and study resulting Sales Journal Entry. Notice that ACCOUNTS RECEIVABLE is credited. Click to see the resulting Customer Aged Detail report. This entry, in effect, gives the customer a credit balance of $1,000.00 Click to continue.

6 Applying a Deposit When shipment is made, you would convert the sales journal into a sales invoice. Change the Payment Method to Pay Later (if the balance is to be paid later). Notice that the $1,000 deposit is in the Deposit Applied box. The Amount Owing field now shows the balance after applying the deposit. Click and study resulting Sales Journal Entry. Notice that the invoice Subtotal amount on the invoice is recorded in ACCOUNTS RECEIVABLE as a debit. Cost of Goods Sold and Inventory amounts are automatically recorded because the company is using Perpetual Inventory. Click to see the resulting Customer Aged Detail report. After the deposit of $1,000.00 is applied, the Amount Owing on the invoice is reflected in the customer balance Click to continue.

7 Journalizing Cash Sales Cash sales (paid in cash, with a cheque, debit card or credit card) although not all, are usually to one-time customers. If so, you have three options: 1. Create a customer subledger for the cash sale customer and enter the sale just like a regular sale. 2. Select and not include customer’s data on the invoice, or 3. Select and enter the customer’s data (name, address, contact) on the invoice without creating a customer subledger (suggested). Using any of the three options, you can produce and print a proper invoice from Sage 50 Accounting. Study the sales invoice at the right. In this particular case, Option 3 above is used. Notice that when Cheque is selected, the Cheque (no.) and Cheque Amount boxes appear. Cheque Amount is automatically filled in according to the Total amount. Study the Sales Journal Entry and click to continue.

8 Journalizing Credit Card Sales Remember that in Accounting, a credit card sale is considered a cash sale. However, Sage 50 treats credit card sales differently from the other payment methods. Before using the credit card payment option, the credit card company information and arrangement details have to be set up in Setup Settings (see above right) which in effect adds the credit card company’s name to the Payment Method option selection (see below right). You may set up more than one credit card company. Click. Notice that a discount fee (3.50% in this example) is entered. This is the agreed fee charged by the credit card company to the seller for processing credit card receipts. You will learn how to set this up in Chapter 4. Click to continue.

9 Journalizing Credit Card Sales (continued) When journalizing this type of sale, select the credit card company’s name among the Paid By options, and enter the invoice as usual. Click. Notice that the invoice TOTAL is automatically entered in the Visa Credit Amount box. Click. The Sales Journal Entry shows that credit card charges $5.34 (also referred to as discount fee) are debited, which is in effect deducted from the total amount charged on the credit card (see Visa Credit Amount box on invoice). Visa Credit Card Bank Account = Visa Credit Amount ($152.55) less Credit Card Charges (5.34). SALES ($135.00) is equal to the invoice total ($152.55) less taxes ($17.55). Click to continue.

10 Journalizing Customer’s NSF Cheque When you deposit a cheque from a customer, the bank adds it to your account balance. If the cheque does not clear, that means that the payor does not have enough funds (Not Sufficient Funds) in their bank account. The bank then reduces your bank balance by the amount of the cheque plus an NSF penalty fee (if the bank decides to charge it). One thing to keep in mind: The bank records transactions opposite from the way you record them in your books; i.e., when your bank account increases, the bank credits your account, whereas you debit your bank account in the company records. Therefore, an NSF cheque would be a credit in the Bank account in your company records, a debit in the bank records. Study the illustration at the right. Click to continue. Customer’s cheque NSF Customer cheque received and deposited Company Bank Account Bank 254.25 254.25 Company Bank Account Bank 254.25 254.25

11 Journalizing Customer’s NSF Cheque (continued) When an NSF situation occurs, record it in a sales invoice, just like a new sale, but filling in only the Item Description, Amount and Account columns (or customize your journal). You would use the original Invoice No. with a suffix NSF to indicate that it is the invoice that correspond to the NSF cheque (see right). Click. Enter the original invoice amount using Bank Chequing Account under Account. You may also add Handling Fee as a separate item (add a new Income type account if necessary) to cover the amount charged by the bank, etc. Click. Study the corresponding Sales Journal Entry. Notice that Accounts Receivable includes the original cheque amount ($254.25) + Handling Fee ($15.00), and the Bank Chequing Account is reduced by the amount of the original cheque. Click to continue.

12 Journalizing Customer Account Write-Off There are instances when all attempts to collect unpaid invoices from customers fail and the vendor decides to write it off. A write-off, whether partial or full, results in a reduction in ACCOUNTS RECEIV- ABLE and the customer’s subledger reduced by the invoice total. Click. An account write-off is recorded in a sales invoice entered with a negative amount. Assuming that the direct write-off is used, it is posted to the BAD DEBT EXPENSE account. Click and study the Write-Off Invoice and the corresponding Sales Journal Entry. The Invoice No. on the original sale is used, prefixed by Wo for Write Off. This allows you to reference the original invoice with the write-off invoice. Notice that Amount is the Subtotal of the original invoice; HST is also the same, both negative. Click to continue. Original Invoice Write-Off Invoice

13 Journalizing Owner Investment (GAAP: Business Entity Concept) When the business owner invests more money into the company, an entry should be made into the company records. (GAAP: Business Entity Concept) Although it is considered a cash receipt, this transaction is entered in the General Journal because it is a bank transfer between a personal bank account and the business bank account. If, instead, a cheque was received from the owner, the entry can be done in either the General Journal or in the RECEIVABLES module as a Miscellaneous Receipt (see HELP for more information on Miscellaneous Receipt). Whatever method you decide must be consistently used. Study the General Journal and the general journal entry at the right. Click to continue.

14 Customer Statements It is good practice to send statements periodically to customers. This not only helps in the collection of outstanding invoices, but it also gives a chance for the customers to check their own records so that they would coordinate with yours. In Sage 50 Accounting, you may print or email a statement to an individual customer, a group of customers, or all customers. As a default, Sage 50 Accounting prints a very simple statement. If you wish to send professional- looking statements with your company logo and grid for the detail columns, set them up in Reports & Forms with Sage 50 Custom Form or take a sample of a statement to your printer and have custom-made pre-printed statement forms done. Click. At the right is a sample customer statement printed on plain paper. Click to continue.

15 Period-End Reports (GAAP: Time Period Principle) Accounting records are summarized periodically and reported to business owners and managers. The reports or statements are usually printed for each month, then at the end of the year. (GAAP: Time Period Principle) (GAAP: Consistency Principle) It is important that your financial reports are produced for the same period of time (monthly, quarterly, yearly) using the same criteria, printed and filed as part of the audit trail. (GAAP: Consistency Principle) At the right are the types of reports you can generate in Sage 50 Accounting that are related to RECEIVABLES. Study the list in the RECEIVABLES Report Centre. Click to continue.

16 More… Go back to your text and proceed from where you have left off. Review this slideshow when you finish the chapter to better prepare yourself for the next chapter. Press ESC now, then click the EXIT button. EXIT

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