I was asked by a senior accountant where the AR terms discounts, listed in
A/R Register ACR520 end up in the General Ledger. Was my reply more or
less correct ??? We are on 405 CD.
I said that the AR discounts as shown in the after billing reports
associated with BIL522 & BIL620, only show up in the RAR file as discounts
the customer is entitled to, provided they pay in the allotted time. At
this point the eligibility for discounts are NOT booked into GL. The only
vanilla report, showing this eligibility, is the A/R register on the date
of the actual billing.
It is only when the customer pays, taking a discount, that the ACR500 cash
transaction records into GL, the amount of the discount, taken by the
customer. At this point the RAR detail AR file is updated from discount
eligibility to discounts actually taken, listed on the ACR250 Discounts
taken report, where we can see which customers took a discount larger than
what our terms call for.
However, this report does not show cases of customers taking discounts
after they expired ... for example maybe they supposed to get the discount
if they pay in 10 days, and the invoice due in 60 days, but they pay after
90 days and take the discount.
BPCS is not enforcing AR terms nor doing a good job of informing management
when AR terms violated. Additional reports needed other than the vanilla
ones to account for this.
When we change AR terms, that only goes into customer orders created after
the change in terms. It is not retroactively affecting orders in existence
when the terms were changed, or invoices to be paid. We can have blanket
orders, where additional items can be added today, to a pre-existing
blanket order, giving the customer AR terms that went obsolete 3 years
ago. A customer order can have up to 999 lines. of requirements, all of
which have the terms that were in effect at the time the order was started,
unless someone changes that.
It is like pricing ... increase list price ... that has no effect on orders
already entered before the price got changed.
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