Accounts Receivable

United Box Company

From: United Box Company Accounts Receivable

To: you

Our industry is adopting the pay-upon-receipt model, as opposed to pay-upon-invoice. In this model, payments are sent by the customers immediately upon receipt of the goods. There is no invoice. Our A/R employees review the funds received electronically (i.e., recorded in our database) from the customers via their banks.

Since sometimes we ship goods that represent partial fulfillment of an order, we may receive several payments for each order.

Shipping is not a process that the A/R system manages. However, we want to store the electronic signature of the customers when they accept goods.

Sometimes we ship too much, or the wrong items. An A/R employee compares the details of the shipment (what items, how many...), with the details of the order from sales and what was accepted and paid by the customer. The purpose of the review is to ensure that the correct amount was received from our clients. If the numbers match, we are done.

However sometimes they do not, and thus we need to reconcile them. Reconciliation is a mostly a manual process. A reconciliation specialist (an A/R employee) contacts the customer via phone and changes incorrect entries in the system. We call these occurrences "reconciliations" and we record them so that they can be reviewed later if needed. Reconciliations are associated to shipments.  A reconciliation includes a date, the amount, the AR employee, the additional payment or credit, and a brief note explaining what happened.

The later a customer is with payments, the lower their creditworthiness. The creditworthiness is calculated based on order and payments dates. The system stores the most recent creditworthiness number and also sends it to the sales department.

Thanks again for your help in doing all this.

- Peter Parker, AR Manager