Introduction
The purpose of this report is to present the findings and recommendations that our team has discovered with regards to the A/P system and process of the company. We evaluated the company based on the business rules provided. Below are our team’s observations about the company’s payment and vendor management processes.
Payment Management
Standard Payment Procedure
Most companies have detailed process maps for employees to use as a guide to successfully complete business activities. The Accounts Payable system is no different. For this client, in order for payments to be made, an order must be placed and an invoice received. While this process may seem like common sense, it’s important to test, and update it, when necessary.
Since we were given the order date, invoice date, and payment date for each record, we were able to create new variables to measure the amount of time between each date. We created three different variables. The first, we named OTI (order to invoice), to measure the gap between order date and invoice date. The second was a DSO (days sales outstanding) variable to measure the gap between invoice date and payment date. We used the final variable to tell us whether the payment date occurred prior to the order date; we called this variable Prepaids. We created these variables in Excel by using simple subtraction formulas.
The OTI variable was created by subtracting the invoice date from the order date. If this variable resulted in a negative
5. No because the amount of the invoice fluctuates for the same product in this type of scheme and therefore it would be difficult to figure out how much the invoice should have been made out for.
Sales invoices are prepared in batches on a daily basis using numbered sales invoices. Sales invoice numbers are automatically generated by the company’s computer system. The accounts receivable clerk does not have appropriate computer rights to override the computer-generated invoice number. Upon preparing sales invoices, the accounts receivable clerk verifies that the first invoice number of the batch is consistent with the last invoice number of the previous batch. Inconsistencies or skipped sales invoice numbers are investigated and resolved before new sales invoices are prepared. The items shipped are compared to the items billed for proper quantity, price, and other sales order terms.
This shows that invoices were made twice for large amounts possibly by fraudsters that have approved the transactions. It’s very clear that the invoices were recorded this way.
Our vision is to develop a design of an auto service and invoicing application. This solution will provide a quote that could be converted to a work order. The work order could be updated as the work is being performed and once complete, it will generate an invoice. The application will allow for the storing of customer information for future studies. We will use Microsoft Access (MS) data access management system (DBMS) to act as the application hub for the JMC Auto
CalendarLookup – this relationship is defined by the link between a set of dates, and the subsequent client order at the company.
Microsoft Invoicing—With this app you can generate your business estimates and invoices. Get paid fast with online payments, track pending and partial payments, find draft estimates and past invoices, set sales tax and discounts, and quickly transform estimates into invoices—all in a few clicks.
The days receivables calculation involves computing net receivables divided by net credit revenues/365. Patton Fuller hospital, for the year 2009, had a net receivables amount of 59,787, this amount can be divided by the net credit revenue (459,900) also divided by 365. The calculation is determined by the formula:
Team 5 also recommends implementing an automated process system that automatically scans and enters invoices into the payment processing software. With the implementation of this software, Pay Later Invoices and Pay Now Invoices can be eliminated from the process. Additionally, Team 5 suggests moving the two employees from Pay Now and Pay Later Invoices to the Final Check activity. This will eliminate the bottleneck of over utilization at the Final Check because the number of employees increases to three. Although the utilization decreases by over 30%, it leaves room for variability and decreases the stress put
Today a mishap transpired with an order that appeared to be incomplete. Although, this had not been caught until the entire order was on the truck. All the contents were cleared to find the two missing boxes, which caused three extra hours of unnecessary work. However, this occurrence rarely happens and can be avoided in the future by double checking orders to their invoices.
“Remit_Num = 0” and then getting the total amount due. By doing this, only those sales which do not yet have a
d. Trace the date, check number, and amount of outstanding item – Occurrence & Completeness. (AU-C 315.A114 a.i-ii)
In addition, I have a strict credit policy if they don’t pay on time they will be charge late fees. This actually works because if they don’t know this at from, it could be a problem. When they know that there is going to cost them more money if they don’t pay on time, usually what happens is they will send me a check sooner than the due date given. Another, thing I do is talking to my customers directly and sending an invoice once a month and if I don’t receive payment from them on due date I’ll give them a courtesy call and remind them that they owe me money. Another crucial thing I do is verify that the invoices for my customers are correct because if I don’t I am going to be short on cash on
To come for a past due payment can be an extremely annoying experience. The annoyance linked with this procedure can be remedied through the use of Billx online invoices. Even as the majority people depend on paper invoices with the intention of performing business transactions, this development can be erratic and deadly. Switching above to an online system is a suitable means to nature of the business. Here are a number of the customs that online invoice systems are better. The productivity of this medium is worth admiring for every business owner.