4B: Complete relevant documentation accurately

When creating an invoice a payments clerk needs to know some basic information in addition to the
financial calculations. This information includes:
who the invoice is to be made out to
the terms of payment (especially if these differ from the company's normal trading terms)
the date of supply

These details allow the payments clerk to create an invoice that contains all the necessary information
and which meets company standards.

Payment terms
Some companies that have simple payment terms also choose to include these terms on the
invoice paperwork. Payment terms can include:
types of payment accepted
the maximum number of days in which to pay
any discount offered if the account is paid before the due date

Invoices
Invoices are a request for payment for goods or services delivered by a supplier.

An invoice will normally have an invoice number, supplier details, customer details, item details, and
amount.

Compare the invoice to the delivery paperwork to make sure it is correct. If the business did not receive
the invoice with the goods, then there is a need to verify that the goods have actually been received.
One way of doing this is to compare the invoice to the cartage note or delivery note which should
accompany the goods and is used to check against the delivery on arrival.

Invoices should be checked to make sure that the quantity and description of goods and services
was as requested/ordered/delivered was actually received Invoices should be further checked to
ensure the correct price was charged and, if applicable, any promised discount was provided.

Statements
As part of an accounts receivable process it is customary to issue monthly statements. These are
designed to provide details of the various transactions entered into by debtors-(those who owe
money to the business).

Whilst many businesses use computerised systems to produce accounts receivable statements,
you need to understand the process so you are in a position to check that all information is
accurate. The most effective way for this to occur is to know the steps to follow when you produce
manual accounts receivable statements.

To produce accounts receivable statements, ensure you know the period to be covered by the
statement. In general, this will be a calendar month, but there are circumstances when
statements are provided more or less often. For example, weekly statements could be sent to
customers with a high level of purchases.

You will need to know the opening balance. This is the amount owed by debtors at the beginning
of the statement period. If Holly Water Pty Ltd owed $3,750.67 at the end of February, for
example, the opening balance of its March statement would be $3750.67.

Make sure you know the name and current address of the debtor and, if different, the entity to be
billed. Sometimes an individual might purchase goods with the authority of an employer who
agrees to be billed for those purchases.

List details of all the transactions entered into by each debtor. You will need to know the date of
each transaction, together with information about the nature of the transaction. You need to
record the amount of the transaction and details of any credit terms.

Transactions recording when debtors purchased goods/ services on credit from the business
should be listed in the debit column.
Any payments made should be listed in the credit column.
Consider the impact of any discount system offered by your business.

In many cases, debtors will be given an invoice as a record of the transaction at the time they
carry out the transaction and statement of account as a reminder of the outstanding amount to be
paid. Detail s of the invoice number should be recorded as part of the account s receivable
statement.

Make sure you have information about any sales returns, forward orders and payments which
have occurred throughout the relevant statement period. Consider the following journal entry in a
debtor's ledger:

GT Legal
Date Docket Details Debit Credit Balance

1 Feb XX Opening Balance 200.17

14 Feb XX 17965 Fasteners 117 .25 317.42

15 Feb XX 17983 Fasteners 389.95 707.37

18 Feb XX 18103 Fasteners 49.36 756.73

27 Feb XX 1 8 209 Fasteners 78.95 835.68

29 Feb XX 987R Cheque-Payment received 200.17 635.51

29 Feb XX Closing Balance 635.51

The opening balance reflects last month's sales, followed by sales for the current period. Payment was
received late in the month leaving a closing balance of $635.51.

Preparing a statement
As part of an accounts receivable process it is customary to issue monthly statements.

Copy the month's transactions for each customer into a summary that can be sent to them.
The journal entries in the debtors ledger contains all the details needed.

Statement
Faster Office Supplies
3/87 The Main Street
Anywhere 3342
ph 03 8123 4009
ABN 47 546 151 733

Supplied to
GT Legal
Freedom Way
Period ended: 29 Feb20xx
Coolar SA 5252

Date Ref Description Dr Cr Balance

1 Feb XX Opening Balance 200.17
14 Feb XX 17965 A4 copypaper 117.25 317.42
15 Feb XX 17983 Printer toner cartridges 389.95 707.37
 18 Feb XX 18103 General stationary 49.36 756.73
27 Feb XX 18209 Binders & Folders 78.95 835.68
29 Feb XX 987R Payment received 200.17 635.51
29 Feb XX Closing Balance 635.51

Aging Current 30 Day+ 60 Day+

635.51 0.00 0.00
The figures near the bottom called aging, are a summary of amounts owing for past periods
shown and serve as an indication of overdue accounts.
Overdue amounts
If there are unpaid amounts from previous statements, highlight them in the current statement to
draw the debtor's notice to overdue amounts.

For example:

GT Legal
Date Docket Details Debit Credit Balance
1 Feb XX Opening Balance 200.17
14 Feb XX 17965 A4 copypaper 117.25 317.42
15 Feb XX 17983 Printer toner cartridges 389.95 707.37
18 Feb XX 18103 General stationary 49.36 756.73
27 Feb XX 18209 Binders & Folders 78.95 835.68

29 Feb XX Closing Balance 835.68

Note that the previous month's balance (the opening balance) has not been paid. The
statement will look like this:

Statement
Faster Office Supplies
3/87 The Main Street
Anywhere 3342
ph 03 8123 4009
ABN 47 546 151 733

Supplied to
GT Legal
Freedom Way
Period ended: 29 Feb20xx
Coolar SA 5252

Date Ref Description Dr Cr Balance

1 Feb XX Opening Balance 200.17
14 Feb XX 17965 A4 copypaper 117.25 317.42
15 Feb XX 17983 Printer toner cartridges 389.95 707.37
18 Feb XX 18103 General stationary 49.36 756.73
27 Feb XX 18209 Binders & Folders 78.95 835.68

29 Feb XX Closing Balance 835.68

Aging Current 30 Day+ 60 Day+

635.51 200.17 0.00
Statement
There is an amount ($200.17) in the aging for 30 days plus. This is an overdue amount and should
be followed up, in accordance with the business's policy or procedure for unpaid accounts.
Usually a phone call to their accounts department or payments clerk will suffice at the beginning.

Now complete the learning task below. (called task 12 in the

activities tab)

Use the information about Snip and Tucks transactions to complete the debtor statement.

Snip and Tuck

Statement

Trimmem Close Supplies

113 Cuttor Pl
Culleden
ph 09 43389921
ABN 98 335 543 234

Supplied to
Snip and Tuck
Beardy St
Cleanliness WA 5252

Period ended: 30 April 20XX

Date Ref Description Dr Cr Balance

Opening Balance

Closing balance

Aging Current 30 days 60 days

Date Docket Details Debit Credit Balance

1 April XX Opening Balance 439.73
14 April XX 179465 Trimmer blades 113.64
15 April XX 179483 Blade oil 17.95 '

18 April XX 181003 Trimmer attachments 216.75

27 April XX 182009 Carry cradle 196.99
29 April XX 9817P Cheque-Payment received 439.73
29 April XX Closing Balance