Accounts Receivable
Introduction
The responsibility for collecting money is one on which the business is dependent. It is not worthwhile opening our gates if we cannot collect payment for our products efficiently.
The key to accounts receivable is to be up to date at all times. Problems in this area get a lot harder to solve as time goes by.
Examples of this are:
(a) Money has been lost between the time it was given to the driver and when it should have gone into the register. If this problem is addressed quickly the customer and the driver can remember the details and the problem can be resolved without unnecessary suspicion or unpleasantness.
(b) Accounts left to operate outside the normal terms encourage customers to think they can get free finance from us.
It is your responsibility to input and process information on our accounts receivable package on the computer, to maintain contact with our customer with our statements, phone calls etc. and to meticulously organise the associated reports and other records.
Inputting and processing data on the computer
(a) The customer details, then invoices and then the receipts must be entered and up to date weekly. These procedures are set out in the notes on MYOB. Make sure the sales written on the invoices are attributed to the correct category. We make decisions and judge staff on the basis of these breakdowns.
(b) Items ordered through the webshop must be invoiced through MYOB. These will be passed to you when the ordered item has been actioned. Direct debit payments must then be matched to invoices.
(c) All journals and credits must be entered prior to month end procedures. See notes on MYOB.
(d) End of month procedures should be completed within a few days of the end of the month. This incorporates printing reports and statements, refer to the notes on MYOB.
Look for any internet direct deposits before sending statements if bank statements are not up to the end of the month.
Sending accounts and customer contact
(a) As soon as the invoices and receipts are up to date for the previous week, check unpaid COD customers. All unpaid COD customers should be discussed with the Yard Manager who will follow up payment.
(b) All statements must be sent in the first week of the month.
(c) No accounts are to be opened for construction companies, builders or development companies. No account applications can be accepted for a post office box as an address.
(d) A record must be kept of all contacts with overdue debtors. Put a dated note in the contact log in MYOB
(e) Be polite with these customers. Good customers can be lost if these contacts are not treated tactfully and firmly.
(f) Throughout the month, if there are accounts that you may deem a problem, discuss with Paul and Alastair.
(g) Leave a clear message if a customer is coming in to pay, or to clarify an account if you will not be in. Probably the best method is to give a particular staff member’s name to the customer and then make sure that he or she knows what is going on.
Overdue accounts policy
If customers are paying within 45 days and it is only taking one phone call per month or less to get our payment, we are satisfied.
If customers are paying on longer than 45 day terms or it is requiring more than one phone call per month to chase up, action is necessary. An email is sent explaining that payment must be strictly within 30-day terms and that future late payments will mean a forfeit of their monthly discounts on outstanding invoices and suspension of account.