This Help File Page was last Modified on 02/23/2020
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<< Click to Display Table of Contents >> Navigation: Accounts Receivable System > Establish Starting Balances > Outstanding Invoices & Partial PaymentsThis Help File Page was last Modified on 02/23/2020 |
❑As you start the Accounts Receivable module in MKMS, once your Subscribers have been entered, (assuming that you have not had your Accounts Receivable data converted by MKS from a previous system) you must identify (or confirm) each Subscriber's Outstanding Balance within this MKMS Accounts Receivable module.
•You have two possible ways to do this:
1.The No Short Cuts Method, or
2.The Quick Start Method
The "No Short Cuts" Method
•For best results:
✓Subscriber Outstanding Balances are established one at a time - Subscriber by Subscriber.
✓There is no short-cut (that is not altogether true - but the short-cut method is usually not recommended - see the "The Quick Start Method" and the "The Hybrid Approach" discussions below for how, and why you may, or may not want to do it that way).
✓Doing it the right way may be a bit more tedious, but remember, done correctly, you will only have to do it once.
(Why is there always enough time to do something right the second time?)
•To help you understand these steps, when specific terms, reports or procedures are referenced, a link is shown to access the chapter that will explain how it should be done within MKMS.
1.If your Company's previous Accounts Receivable system was manual:
a.Look at the Ledger Card for that Subscriber.
b.Identify each Outstanding (unpaid, or only partially paid) Invoice.
2.If your Company's previous Accounts Receivable system was implemented with a software application:
a.Print an Accounts Receivable Report (to a PDF or Excel File, if possible).
b.Use these PDF or Excel documents to identify each Subscriber's Outstanding Balance Due on those (unpaid) Invoices.
c.Print a copy of each outstanding Invoice, or a detailed Statement for each Subscriber listed on that Accounts Receivable Report.
B.In either case (manual or software based), determine which Invoice(s) really need to be entered:
•You may only want to enter Invoices that are unpaid (and partially paid - see the "C. Dealing with Partially Paid Invoices" discussion below).
✓However, you might want to enter All Invoices for the Sales that occurred within a specific time frame (i.e. a Date Range ending Today) to establish some previous sales and payment Accounting History).
•Enter those Invoices - which meet your Company's Accounting History needs - into the MKMS Accounts Receivable System.
1)Enter each outstanding Sale as a new Invoice.
2)Enter the original Sale Date of each Invoice.
3)Include (as individual Invoice Detail line items) the specific information about each element of the original sale (e.g., Parts, Labor, Monitoring Fees, etc.).
4)In the Comment section, enter the original Invoice Number (from the old software or manual system) and any other information that might be helpful to you - when and if you need to refer back to it.
5)Write the new Invoice Number on the original Invoice documentation.
✓Optionally:
b)Attach it to the original Invoice.
•Check the Results!
1)Print/View a Subscriber Statement in MKMS for this Subscriber.
2)Validate that all the open (unpaid or partially paid) Invoices you found are listed, and their Total Balance Due is correct.
3)Compare this Subscriber Statement with the old paper Ledger Card or whatever printed Accounts Receivable Report you have from your old software based system.
4)Make corrections, as needed.
C.Dealing with Partially Paid Invoices
•As you start the Accounts Receivable module, you must enter your Subscriber's Outstanding Balances.
•Some of these Outstanding Balances may be from Invoices which have been partially, but not completely, paid - usually because of an initial Deposit that was collected for it.
•In this case:
1)Enter the original Sale with its full original value as a new Invoice.
2)Enter a Receipt representing the partial payment previously made for this Invoice.
3)Allocate this partial payment to that Invoice.
The Quick Start Method
•Why Choose the Quick Method?
✓You have a large number of Subscribers with an Outstanding Balance.
✓You have a very limited amount of time to get up and running.
✓You will be able to preserve the old system for sometime, so you will still have a "look up " the reference source.
•How to:
✓Get the Outstanding Balance (see the "A. Get the Outstanding Balance" discussion above)
a)Create a Sale-Purchase Item titled "Previous Balance"
b)Create one Invoice with a single Previous Balance Detail Line Item totaling the entire Balance Due.
✓Alternately, enter a Detail Line Item for each outstanding Invoice owed by this Subscriber.
a)Make sure that this Invoice's Balance matches the total Outstanding Balance owed by this Subscriber.
b)Enter a comment on the new Invoice noting what it covers (Invoice Numbers, Partially Paid Invoices, etc.).
•Why to Not Choose the Quick Method?
✓There may be several outstanding Invoices for many of your Subscribers - each with numerous Detail Line Items.
▪Payments for those Invoices will come in - usually - for one Invoice at a time.
▪This means that this "Previous Balance" Invoice may eventually have multiple payments posted to it.
✓Over time, it may not be clear to the Subscriber what payment(s) they made, and how they were posted to what (old) Invoices they owed.
▪Sending a reminder Statement will not list all their outstanding Invoices - just the net balance due represented by a single Invoice.
✓It may be somewhat confusing to the Subscriber (and to you) as they (and you) try to reconcile what they actually still owe you.
❑The Hybrid Approach
•Sometimes compromise is good:
a)For those Subscribers with only one or two Outstanding Invoices, use the Quick Start Method.
b)For those Subscribers with several Outstanding Invoices, consider the No Short Cuts Approach