Blog Posts for ‘TRAVERSE’

When cash is limited, customers typically prioritize payments based on their needs, personal relationship with your firm and on your firm’s position towards credit and collections.  At this point, you can’t influence customer needs nor your personal relationship with them, so you may want to re-think your attitude toward credit and collections.

Key points: Continuously remind customers that payment is expected and the consequences for not paying per credit terms.

To accelerate receivables turnover:

• Invoice customers as soon as possible
• Avoid payment delays by making sure invoices include sufficient details and are error free.
• State on invoices early payment discounts along with discount payment due dates and late payment penalty terms.
• Send follow-up statements every 15 days and with accrued service charges.
• Be flexible with payment options;  accept electronic checks, credit or debit cards or any other method that gets you paid faster.

Monitor customer receivables and changes in the average number of days receivables are outstanding.  Sudden changes in a customer’s payment pattern may warn of trouble ahead.  You can find information such as this in the Customer Inquiry History screens in TRAVERSE and OSAS.

• Print the General Ledger journal for ‘unposted’ entries in the prior year for Periods 1 and 2 and make sure none really belong in the new year.
• Examine all your General Ledger entries for Period 1 and 2 of the prior year and confirm that none of those really belong in the new year.  We have often seen users enter the wrong year, especially in early January as they are getting used to the new year.
• Examine your General Ledger entries for Period 12 of the new year.  If there are any entries, they were probably posted to the wrong year in error and may belong in the prior year.
• Run “Post To Master” on the prior year’s General Ledger entries, then update your Current Year in General Ledger to insure everything that was done in the prior year is brought forward.  Be sure to do this after any entries are posted to last year.
• If you will need to re-run prior year Trial Balances for Accounts Receivable or Accounts Payable, do NOT purge paid invoices yet.  Wait until you no longer need to reprint those prior year Trial Balances before purging.
• When you need to make adjusting entries to the General Ledger for the prior year, remember to switch to that prior year in Periodic Processing before making those entries.  General Ledger is not date sensitive like the other applications so you must be in the correct year in order to make prior year adjusting entries.

To help narrow the federal deficit, the IRS plans to add the following new 1099 reporting rules to the 2010 tax year:

• Independent contractors that do not provide a valid Tax Id Number would be subject to withholding.  Thus, employers would have to verify TINs.
• Corporate payments would require a 1099 when the total payments exceed $600 per year. 
• Landlords would have to file 1099s on payments to service providers such as plumbers and carpenters. 
• Penalties will increase by double and the calendar year maximums will increase by between three and six times the current levels.

Do you have old Purchase Orders hanging out there in various statuses that are complete as far as you are concerned but just won’t go away?  Here are suggestions on clearing them out:

If the ‘Ordered’ quantity is more than the quantities ‘Received’ and ‘Invoiced’ , simply edit the ‘Ordered’ to equal the same amount as those ‘Received’ and ‘Invoiced’.  The next time purchases are posted, this Purchase Order will be removed.

If the ‘Received’ quantity is higher than the ‘Ordered’ quantity, this purchase order needs to be completed by applying the invoice to the ‘Received’ goods.  Then you can create a Debit Memo to remove those items from Inventory.

Purchase Orders will be removed once all line items have been received and invoiced.  So the main clue to cleaning up old Purchase Orders is to make sure each line of the Purchase Order has been satisfied.