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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Al Macintyre



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