Following is a list of few terms which are quintessential for any Accounts Receivables(AR) Functional Consultant.
The following terms relate to Transactional Documents which will be used when dealing with AR Transactions.
Invoice:
Invoice can be defined as a bill for the purchase in a laymans terms. Technically Invoice in AR is defined as a Bill or document showing the amount owed, the item(s) purchased, the price and quantity, and the billing date, and requesting payment for a credit order. In many businesses, particularly direct marketing, invoices are accompanied by a letter and a reply envelope.
Credit Memo: A Credit Memo (short for "credit memorandum") is a commercial document issued by a seller to a buyer, listing the products, quantities and agreed prices for products or services the seller provided the buyer, but the buyer did not receive or returned. It may be issued in the case of damaged goods, errors or allowances. In respect of the previously issued invoice, a Credit Memo will reduce or eliminate the amount the buyer has to pay.
Chargeback: (In terms of a Credit card) A chargeback is a reversal of a credit-card transaction, as viewed from the perspective of the merchant. It usually occurs when a consumer files a complaint with their bank or credit/debit card provider. This usually happens when a consumer discovers fraudulent transactions on their statement.
Deposit: It can be termed as a Caution deposit paid by a customer to do a business with the organization.
Guarantee: This is similar to that of deposit but sometimes a bank comes into the picture. A bank provides a guarantee to the organization for a customer. Such scenarios are applicable when a very good customer of a bank approaches the bank to provide the guarantee on his behalf to the organization to do any kind of business.
Debit Memo: In situations where there is a need for raising an invoice without an order, we use Debit memos. These are similar to that of Invoices but do not have any underlying order.
Adjustments: Adjustments are made whenever there is an error while creating an invoice. Instead of scratching the entire invoice, the erred amount is adjusted using the adjustment account.
The following terms will be used predominantly while using the Receipts workbench in AR.
Receipts:
Receipts in a broader term can be defined as The amount the customer pays to the organization in lieu of an invoice or a transaction that he has performed with the organization.
There are two types of receipts which are in use and they are
Standard Receipt: It is the payment that the organization receives either in cash or cheques for the services or goods provided. This type of receipt is also called as Cash Receipt.
Miscellaneous Receipt: These kinds of receipts are issued whenever there is no direct customer involved for the money coming into the organization. Money received in the form of Refunds from IT dept. investments, interest and stock sales and many more other sources are normally accounted by creating a Miscellaneous receipt.
Lets have some more details about receipts like the receipt Status.
Receipt Status:
A receipt can have the following status:
Approved: This receipt has been approved for automatic receipt creation. This status is only valid for Automatic Receipts.
Confirmed: The customer has approved the application of this receipt and their account balances have been updated within Receivables. This status is only valid for automatic receipts.
Remitted: This receipt has been remitted. This status is valid for both automatic and manually entered receipts.
Cleared: The payment of this receipt was transferred to your bank account and the bank statement has been reconciled within Receivables. This status is valid for both automatic and manually entered receipts.
Reversed: This receipt has been reversed. You can reverse a receipt when your customer stops payment on a receipt, if a receipt comes from an account with non-sufficient funds or if you want to re-enter and reapply it in Receivables. You can reverse cash/Standard receipts and miscellaneous transactions.
More updates on Accounts Receivables to follow. Please feel free to post your comments and queries if any.
