Lesson 6

Configuration of Accounts Receivable

Back to F050: Basic Financial Configuration

Lesson 6: Configuration of Accounts Receivable

Before users can start adding customer accounts and documents into Acumatica ERP, the basic accounts receivable functionality has to be implemented in the system. This chapter describes the basic configuration to be performed, including defining a statement cycle, creating a customer class, and specifying the preference settings for accounts receivable.

Accounts Receivable: Statement Cycles

In Acumatica ERP, you can define any number of statement cycles to be used for collecting payments from customers. At the end of each statement cycle, the company prepares statements and sends them to its customers. Statements provide customers with records of their financial activity for a specific period, including the ending balance.

Statement Cycle Setup

You use the Statement Cycles (AR202800) form to create new statement cycles and modify existing ones. For each statement cycle, you define the following:

  • The schedule according to which statements will be generated.
  • The aging periods to be used. You can define five aging periods for each statement cycle, to group the sums of the balances of open invoices, overdue charges, and debit memos by the number of days they are past due. The system uses the aging period settings in accounts receivable aging reports, which users can analyze to identify potential cash flow problems.
  • The statement processing options.
  • The overdue charges. You can assign a statement cycle to a customer class by using the Customer Classes (AR201000) form and directly to a customer on the Customers (AR303000) form.

Accounts Receivable: To Create a Statement Cycle

In this activity, you will learn how to define a statement cycle in the system.

Story

Suppose that the SweetLife company informs its customers about their current balances and outstanding documents by sending customers statements at the end of every month. In the statements, the outstanding customer documents should be broken down by the following aging periods: 0 to 10 days, 11 to 20 days, 21 to 30 days, and more than 30 days. The outstanding documents are aged based on their due dates. Acting as an administrator, you need to define the statement cycle in the system.

Process Overview

In this activity, you will create a statement cycle on the Statement Cycles (AR202800) form.

Step: Defining a Statement Cycle To define a statement cycle, do the following: Lesson 6: Configuration of Accounts Receivable | 42

  1. Sign in to the company you have prepared with the admin username.
  2. On the Statement Cycles (AR202800) form, add a new record.
  3. In the General Settings section, specify the following settings:
  • Cycle ID: EOM
  • Description: End of Month
  • Schedule Type: End of Month
  1. In the Aging Settings section, specify the following settings:
  • Use Financial Periods for Aging: Cleared
  • Aging Period (Days), 1 –: 10 Once you specify the first aging period, the system automatically specifies the other aging periods, based on the assumption that all the aging periods will have the same length. The system also automatically specifies the descriptions for aging periods. If needed, you can change the automatically specified settings of aging periods to custom ones.
  • Age Based On: Due Date This setting means that the system will use the due dates of the outstanding documents to determine the appropriate aging period in customer statements and accounts receivable aging reports for outstanding invoices, debit memos, and overdue charges.
  1. On the form toolbar, click Save.

Activity Recap

In this activity, we have illustrated how to create a statement cycle and specify its aging settings.

Accounts Receivable: Customer Classes

A customer class groups customers that have similar characteristics. Customer classes can be based on the types of goods or services the customers buy or on other properties, such as each customer's currency and payment method.

Defining a Customer Class

You define customer classes and their settings on the Customer Classes (AR201000) form. You specify a customer class when you create a customer account on the Customers (AR303000) form, which causes the system to fill in the values of the class for the customer. Any of these default values can be overridden. During basic system configuration, you need to create only the customer class to be used by default; you then specify it as the default customer class on the Accounts Receivable Preferences (AR101000) form. When you create a customer class, the system automatically inserts the values of the default customer class, any of which can be overridden. When you create a new customer account, the default customer class is initially specified as the customer class, but you can change it to any other class.

Accounts Receivable: To Create a Customer Class

In this activity, you will create a default customer class in the system. This class will provide many of the settings for newly created customers and for other customer classes you create, thus easing the creation of these entities during the next phase of implementation. Among other settings for the customer class, you will specify the credit terms you have created. Lesson 6: Configuration of Accounts Receivable | 43

Story

Suppose that most of the customers of the SweetLife company use the same settings, such as credit terms, statement cycle, payment method, sales account, AR account, and cash discount account. Acting as an administrator, you need to create a default customer class with these settings so that it can supply default settings when customers and other customer classes are created in the system.

Process Overview

In this activity, on the Customer Classes (AR201000) form, you will create the default customer class and specify its settings.

Step: Creating the Default Customer Class To create the default customer class, perform the following instructions:

  1. Sign in to the company you have prepared with the admin username.
  2. On the Customer Classes (AR201000) form, add a new record.
  3. In the Summary area, specify the following settings:
  • Class ID: DEFAULT
  • Description: Default Customer Class
  1. In the Default General Settings section of the General tab, select US - United States of America in the Country box.
  2. In the Default Financial Settings section of the General tab, specify the following settings:
  • Terms: 30D - 30 Days
  • Statement Cycle ID: EOM
  • Payment Method: CHECK - Check Payment
  1. On the GL Accounts tab, specify the following accounts:
  • AR Account: 11000 - Accounts Receivable
  • Sales Account: 40000 - Sales Revenue
  • Cash Discount Account: 52600 - Cash Discount
  1. On the form toolbar, click Save.

Activity Recap

In this activity, we have illustrated how to create a customer class, specify the default financial settings for it, select the credit terms, and specify the required GL accounts used by this class.

Accounts Receivable: To Specify Accounts Receivable Preferences

In this activity, you will learn how to define the basic settings to be used for the accounts receivable functionality.

Story

Suppose that as an administrator, you need to define the preference settings for the accounts receivable functionality. You need to specify the default customer class and other settings that will make it easier for users to create AR documents. Lesson 6: Configuration of Accounts Receivable | 44

Process Overview

In this activity, you will specify accounts receivable preferences on the Accounts Receivable Preferences (AR101000) form.

Step: Specifying the Accounts Receivable Preferences To specify the basic settings that will apply to accounts receivable, do the following:

  1. Sign in to the company you have prepared with the admin username.
  2. Open the Accounts Receivable Preferences (AR101000) form. Note that all the required settings (that is, those marked with an asterisk) have already been specified by default.
  3. In the Posting Settings section of the General tab, make sure that the Automatically Post on Release check box is selected. With this setting, AR transactions will be automatically posted to the general ledger once they are released.
  4. In the Data Entry Settings section of the General tab, specify the following settings, which simplify the processing of AR documents:
  • Default Customer Class ID: DEFAULT
  • Hold Documents on Entry: Cleared
  • Validate Document Totals on Entry: Cleared
  • Require Payment Reference on Entry: Cleared
  1. On the form toolbar, click Save.

Activity Recap

In this activity, we have illustrated how to set up accounts receivable preferences—data entry settings and the settings that affect the posting and release of AR documents.

Customers: General Information

In Acumatica ERP, each customer account stores all customer-related information you need to conduct business with your company’s customers. This information includes addresses, locations, contacts, and payment methods, as well as financial, billing, delivery, and mailing settings. Acumatica ERP provides you with different tools that ease the process of entering customer data and help you to organize this data on reports.

Learning Objectives

In this lesson, you will do the following:

  • Create a new customer based on the default customer class
  • Review the default settings that the system has inserted from the customer class

Applicable Scenarios

You add customer accounts in the following cases:

  • When you initially configure Acumatica ERP and enter the customer base into the system Lesson 6: Configuration of Accounts Receivable | 45
  • When you need to create an account for a new customer of the company

Entities Needed for Customer Account Setup

Before you start setting up customer accounts in Acumatica ERP, you need to configure the entities that will ease the processes of customer account creation and maintenance. The needed entities in Acumatica ERP may include the following:

  • Customer classes (required): You should ensure that at least one customer class has been set up on the Customer Classes (AR201000) form. Customer classes provide default values for individual customer accounts, so users can create customer accounts more easily. Besides the class ID and description, which are the required settings of a customer class, it can contain additional elements, such as general settings, delivery elements, credit verification settings, financial settings, print and email details, general ledger accounts, and mailings. For details, see Accounts Receivable: Customer Classes.
  • Customer identifiers (optional): You should make sure that the segmented key used as a template for identifiers of customer accounts suits your needs, and adjust the BIZACCT segmented key (or the CUSTOMER key) on the Segmented Keys (CS202000) form if needed.
  • General ledger accounts (required): On the Chart of Accounts (GL202500) form, you need to create the general ledger accounts to be used to record sales and cash discounts, unless you plan to use the accounts that already exist. You will need to select these already-defined accounts when you create customer accounts. For details, see To Add an Account to the Chart of Accounts.
  • Statement cycle (required): You need to ensure that at least one statement cycle has been set up on the Statement Cycles (AR202800) form, which will be assigned to a customer class (and therefore to all customers that are assigned to this class). For details, see Customers: Implementation Activity.
  • Payment methods (required): You need to ensure that at least one payment method to be used for customer payments has been defined on the Payment Methods (CA204000) form. For details, see Managing Payment Methods.
  • Credit terms: You should ensure that each needed set of credit terms that will define the due dates of documents has been set up on the Credit Terms (CS206500) form. When you set up customer classes, you can assign the appropriate credit terms to classes, which in turn will cause the credit terms to be assigned by default to all new customers of this class. For details, see Setup of Credit Terms.
  • Overdue charges (optional): You can set up overdue charges on the Overdue Charges (AR204500) form, which define additional charges that customers will incur for open documents that are past due and assign the charges to a customer class (which causes them to be assigned by default to all new customers of this class). For details, see Overdue Charges: General Information.
  • Mailings (optional): You can set up multiple mailings to notify customers about their balances, invoices, sales orders, and other information you want to send to customers on a regular basis. For details, see Mailings for Customers: General Information.

Customers: Implementation Activity

The following activity will walk you through the process of creating a new customer.

Story

Suppose that the SweetLife Fruits & Jams company wants to create a customer account for one of the local cafes, Prime Cafe, to enable them to buy the SweetLife products on credit, with payments due in 30 days. Acting as a SweetLife administrator, you need to create the needed customer account in the system. Lesson 6: Configuration of Accounts Receivable | 46

Process Overview

In this activity, you will create a new customer on the Customers (AR303000) form. On the tabs of this form, you will specify the customer's address and contact information. You will then review the default settings, which the system inserted to the customer account when creating the customer, and then review the credit terms for the customer.

Step 1: Creating a Customer Account To create a customer account, do the following:

  1. On the Customers (AR303000) form, add a new record.
  2. In the Summary area, specify the following settings:
  • Customer ID: PRIME
  • Customer Status: Active (selected automatically)
  • Customer Class: DEFAULT (selected automatically)
  1. In the Account Info section on the General tab, specify Prime Cafe in the Account Name box.
  2. On the form toolbar, click Save.

Step 2: Specifying Contact Information and Address To specify contact information and address for the customer, do the following:

  1. On the General tab, specify the following settings in the Primary Contact section:
  • Name: Scott L Kennedy
  • Job Title: General Manager
  • Business 1: 973-345-7083
  1. In the Account Address section of the General tab, specify the following main address for the customer:
  • Address Line 1: 2720 Jadewood Farms
  • City: Paterson
  • State: NJ
  • Postal Code: 07501
  1. On the form toolbar, click Save.

Step 3: Reviewing the Statement Cycle Settings To review the customer's statement cycle settings, do the following:

  1. In the Financial Settings section on the Financial tab, in the Terms box, make sure that 30D is selected.
  2. In the Statement Cycle ID box, make sure that EOM (End of Month) is selected.
  3. Click the Edit button next to the Statement Cycle ID box. The Statement Cycles (AR202800) form opens in a pop-up window.
  4. Review the statement cycle settings for the customer on the Statement Cycles form.
  5. Close the pop-up window with the Statement Cycles form.
  6. On the Customers (AR303000) form, in the Credit Verification box (Credit Verification Rules section), select Disabled.
  7. On the form toolbar, click Save. Lesson 6: Configuration of Accounts Receivable | 47

Step 4: Reviewing the Default Customer Information To review the default customer information, do the following:

  1. On the Billing tab, review the customer's bill-to address. Because the Override check box is cleared for the bill-to address, the system has inserted the information from the Account Address section on the General tab.
  2. On the Shipping tab, review the customer's shipping information. Because the Override check box is cleared for the ship-to address, the system has inserted the information from the Account Address section on the General tab.
  3. On the Payment Methods tab, review the customer's payment methods and notice that the CHECK payment method is the default one for the customer (the check box in the Is Default column is selected).
  4. On the GL Accounts tab, review the GL accounts to be used for settlements with this customer.

Activity Recap

In this activity, we have illustrated the following:

  1. The accountant created a new customer and specified its address and contact information. Then the accountant reviewed the settings of this customer's statement cycle.
  2. When the customer record was saved, the accountant reviewed the default customer information inserted by the system in the customer record.

Customers: Related Reports and Inquiries

This topic describes the reports, inquiries, and forms you may review to gather information about customers.

Reviewing Customer Documents

You can review the customer's documents at any time on the Customer Details (AR402000) form. The form shows the detailed balance and the list of documents for the particular customer. By default, the form shows all the customer's open documents. You can also run this inquiry by clicking Customer Details (under Inquiries) on the More menu of the Customers (AR303000) form. To review the customer documents that have been released (documents with the Open, Closed, and Reserved statuses), you run the AR Register (AR621500) report.

Reviewing Customer Profile

To review the database information for a particular customer, you run the Customer Profiles (AR651000) report. You can also run this report by clicking Customer Profile (under Reports) on the More menu of the Customers (AR303000) form.

Reviewing Customer Documents and Balance

You can review the open documents, applications, and customer balances at the end of a period, grouped by customer and AR account by running the AR Balance by Customer (AR632500) report. Lesson 6: Configuration of Accounts Receivable | 48

Reviewing Customer Balance

You can review the customer balance, which you can further reconcile with the balance of the accounts receivable GL account, by running the AR Balance by GL Account (AR632000) report. To reconcile the GL balance of the AR account with the customer balance, you compare the balance obtained in this report with the trial balance for the same period.

Reviewing Customer Balance History

You can review the history of the customer's balance over a specified date range by running the Customer History (AR652000) report.

Recalculating Customer Balances

You can use the Recalculate Customer Balances (AR509900) form to recalculate customer balances. Balances are recalculated based on the history records (released AR documents) that are matched to the customer balances stored in the database. Also, you can run this process if there is any discrepancy between the customer balance and the total amount of all the released customer documents.