Understanding Period Ending Procedures in A/R
About Month-End Procedures
The month-end procedure prints a report of outstanding balances in accounts receivable and all accounts receivable activity for the month. There are three month-end procedures: renaming files, printing a trial balance, and printing statements.
Renaming Files
When you run the (MA) Daily Procedure at the end of each day, the JO- SUMMARY file is updated with all the pick tickets from the P-SUMMARY file that moved to status B that day (if you use summary invoicing). The JO-GLOBAL file is also updated with the day's new pick ticket and summary invoice information from the P-GLOBAL file when you run the (MA).
At month-end, you must rename the files JO-GLOBAL and JO-SUMMARY (you have the JO-SUMMARY file only if you use summary invoicing). Renaming these files each month lets you continue to store past and present pick ticket and summary invoice information while keeping your files a reasonable size. Your current pick ticket and summary invoice information is always in the JO-GLOBAL and JO-SUMMARY files, and your past pick ticket and summary invoice information is in the renamed files.
You rename these files according to the month that you are ending by replacing the letters JO in the file name with the number of the month. For example, if you are completing month-end procedures for April, you would rename the files 04-GLOBAL and 04-SUMMARY. You rename files at month-end through the (MI) Sales Journal Month-End Procedure screen.
Printing a Trial Balance
After all postings are entered, print a full trial balance. The A/R Trial Balance Report shows all accounts receivable posting details and totals for the month. This process also ages the accounts.
Note: It is not necessary to print a trial balance to age accounts. To age the accounts without printing the report, type Y in the Age Only field of the (OR) Accounts Receivable Reports screen when requesting the trial balance. For more information about printing a trial balance, see Reports Menu.
Calculating Finance Charges
If you assess finance charges, calculate them through the (O) or (OR) screen. Before you can calculate finance charges, you should set the finance charge parameters in the (LA2) A/R Parameters screen. In addition, you should also age your accounts before calculating finance charges.
When you calculate finance charges, the system calculates the finance charge for every overdue invoice in the AR-MASTER file. Therefore, you cannot use the sorts and limits to report finance charges for certain customers. However, to eliminate finance charges for key customers, use the Exempt Status field in the (LA2) screen.
You should also calculate finance charges before printing statements. That way, the statements you print include up-to-date finance charges. If you try to calculate finance charges more than once during a single month, the system replaces the old finance charges with the new ones.
The Pick field in the (LA2) screen determines how finance charges are posted. If you set this parameter to Y, the system creates a status 8 pick ticket for each finance charge. You can change these tickets and move them to invoice status, just as you do with any other pick ticket. If you set the Pick field to N or leave it blank, the finance charges are posted directly to A/R.
Note: Calculating finance charges is a batch process. No report prints.
For more details about calculating finance charges in the (O) and (OR) screens, see Reports Menu.
Printing Statements
If you send your customers statements, you do not have to run them on the last day of the month. The aging and cutoff dates set in the (OR) screen let you run statements at your convenience. (For information on printing statements, see Reports Menu.)
Note: To exempt a customer from receiving statements, set the Statement Exempt box to Y in the Customer Order Entry tab. The customer's assigned finance charges are calculated whether the customer's statements are printed. When you post payments in the Accounts Receivable Posting window, the Statement Exempt box in the Payments tab indicates whether this customer receives a statement. However to change this setting, you must do so in the Statement Exempt box in the Customer Order Entry tab. The Statement Exempt box in the Accounts Receivable Payments tab is for display purposes only.
Before printing statements, there are two optional steps you may need to take: purging completed invoices, and calculating finance charges.
If your customers want statements that include only outstanding invoices (invoices that they haven't paid yet), purge completed invoices before you print statements.
If your customers prefer statements that include both outstanding and paid invoices, do not purge completed invoices until after you print statements. For information about purging completed invoices, see About Purging Completed Invoices.
If you assess finance charges, you must do this before printing statements. For instructions, see Reports Menu.
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