Introduction

One of the most important functions in handling the Corporate Receivables module is the month-end process, which the Advantos Enterprise Accounts Receivable module shares with all other Advantos Enterprise modules. This process updates customer balances and totals, cleans up paid invoices, and flags all transactions as having been printed on a monthly statement.

One key point to understand, and to train your Operators to be observant about, is the monthly accounting period that the A/R module is currently processing in. This period is shown on the main web form for the module. During month-end processing, operators should not enter transactions until the system indicates it has been updated into the next processing month unless they are processing month-end transactions. If this convention is not observed, you will be adding data to your totals as you are trying to balance and balancing problems can occur. In addition, transactions may be posted the aren't captured by the reports prepared. To minimize this problem, the Accounts Receivable System sets a flag so no further transactions can be processed until the system indicates it has been rolled into the next processing month. A System Adminstrator security level can over-ride the flag. In addition, we recommend the user for each module also be responsible for month-end processing. This restricts the number of persons accessing the module during critical periods, and will provide important feedback to the user as to the effects of decisions made during the processing month.

Cautions

Use the A/R checklist for the month-end processing (see link above). We will review all steps, explaining what is to be accomplished and what to do if information does not balance. In looking at the actual checklist, you will note there are navigation instructions to the menu selections and reports you are instructed to print or the processes you need to perform. It is important to note, a great deal of balancing is required during this process. Balancing is critical to the proper operation of the accounting system. It is critical to know when the accounting system is having problems and the balancing processes will detect problems before an update is run and errors work their way into financial statements. In many cases, an imbalance can be caused by hardware malfunctions or connectivity issues, but it is important to know when such conditions have affected your data base.

The following steps are indicated on the End-Of-Month checklist:

Import Mgmt Fees if they are Invoiced at EOM via T/R

If the management company bills at the end of the month this is the appropriate time to import the billings into the management company's A/R module. Here the user creates A/R invoices from the A/P invoices created during the T/R month-end process (that is where the actual management fees were created). This updates the management company's books with invoices and can also create receipts for these same A/P checks.

If the management fees are created and collected at the beginning of the month then this process should be skipped because it has already been done for the management fees. However, there may easily be other A/P checks issued to the management company throughout the month and these checks can be imported into A/R at this time.

Validate Financial Totals and Balances

• All Payments Verified and Entered - Payments are posted throughout the entire month. This step simply reminds you to post any payments, NSFS, or other transactions, not already posted (and deposited). Don't forget to process a deposit if one is needed.
  
  
• Set End-of-Month Processing Flag - Use menu# 1.7.1 to set the End-Of-Month processing flag. This restricts the ability to post additional transactions to update and system administrator security levels. Error messages are displayed, though, for all who attempt to create additional transactions.
  
  
• Validate Cash Totals - This process ensures cash balances are the same in A/R, the Bank System, and General Ledger. The deposits to the bank should balance with these amounts. The Operator must verify all payments received in the current processing month are deposited, posted to the A/R System, and a record of the deposit (a bank deposit receipt) verifies this. It is very important to know you have deposited all funds received and posted. Therefore, as deposit receipts, NSF notices, and other bank adjustments are received from the bank, they must be posted and the documents must be held until month-end processing so they may be totaled and used as part of the cash receipts balancing procedure.
  
  If there are errors, you will need to research the difference(s) and make corrections. For example, a common cause of a discrepancy is an item included in a bank deposit (or a bank adjustment, such as an NSF) but not posted to A/R. This would indicate deposit items (receipts, NSF items, etc.) were not properly reflected by the system and additional training could be done (e.g. an operator may have processed a deposit before verifying data against the pre-deposit report). It is always possible some hardware or network issue has occurred. In this case detail reports will need to be printed for the bank account (deposits), G/L Postings detail for cash, and Cash Receipts reports. These detail reports provide information needed to track down the imbalance. Note: the three reports should be attached to the checklist when completed. All notations of errors and the corrections needed should be written on these reports. If new reports are run they also should be included with the checklist.
  
  
• Print Customer Invoice Balance Report - Run this report to determine if the A/R module has an imbalance between A/R invoice totals and Customer balances.
  
  

Clean Up Customer Accounts

• Print Delinquent Listing Report - This report shows all unpaid invoices by customer# with dates, descriptions, and total balance due. It is an excellent delinquency report when no agings are required. This is a "file copy" report.
  
  The accounts on this report have to be cleaned up. This is accomplished by applying advance payments and credit memos to outstanding invoices. This task can provide an excellent opportunity to review your Operator's understanding of the Payment Posting function.
  
  

Print Point-in-Time Reports

These reports are the normal end-of-month reports that are kept in the monthly financial folders for each client. By running these reports, each client has a single ".pdf" document with all appropriate reports contained within it.

These reports are created and transferred to the management company's secure FTP directory on the Advantos server(s). They can be collected from there by using the proper SFTP Client software, normally Bitvise SSH Client (formerly Tunnelier).

Run Month-End Processes

These processes should be run at the end of each monthly financial period. It cleans up various financial information and prepares each module to begin the next financial period.

• Process End-of-Month Update - The A/R Update is the most important function and must be performed at month-end once all data has been posted and management reports printed. The system will run this process automatically with only a few prompts, allowing you to record select information. Many housekeeping tasks are performed here. Customer month-to-date data is cleared, paid invoices are deleted, cash receipts are deleted, current postings are flagged as having appeared on a monthly statement, and finally, the current processing month is set forward one month. Also the year-end update will automatically occur when updating December of any year. This year-end update will perform a data backup on media and year-to-date purging of customer account totals. You will not be allowed to maintain the A/R System more than one month in advance of the General Ledger System. Also, you will not be allowed to do a General Ledger update when an A/R update has not been performed.
  
  
• Create Monthly Automatic Charge/Credits - After the end-of-month process is finished, the first entries for the new month should be the recurring charges/credits booked to customer accounts. By running this process now, these items will be the first entries on the account every month, and you will ensure they will not be forgotten.
  
  

Create Mgmt Fees if they are Invoiced at BOM

If the management company bills at the beginning of the month this is the appropriate time to create the management fee billings which creates A/P from clients to the management company. The user then makes sure the A/P is paid (via an A/P check-run). Then A/R invoices from these A/P checks can be imported into A/R that, essentially, updates the management company's books. This entire section should be skipped if the management fees are billed during the T/R EOM process.

This process is normally run at the end of T/R because a percentage fee is based on receipts received throughout the entire monthly period.

• Client Fees and Other Data Report - Print and review this report to ensure the management fees will be processed correctly and have the correct amounts.
  
  
• Create Management Fees - This process creates the company's management fees and creates A/P invoices from each client to the management company's vendor. Once these are created you can then either print checks or run another process that will transfer funds to the management company's bank account.
  
  
• Create A/R from A/P - This process creates the management company's A/R invoices from the A/P invoices to the Management company's vendor. It can also record the A/P checks as "receipts".