What Is Accounts Receivable Reconciliation?

Accounts receivable (Receivables) Accounts receivable refer to the amount of money that should be collected by the purchaser for the sale of goods, products, and labor services in the normal course of business, including those that should be borne by the purchaser or the recipient Taxes, packing fees paid by the buyer, various transportation and miscellaneous fees, etc. In addition, in the case of sales discounts, factors such as business discounts and cash discounts should also be considered ^[1] .

accounts receivable

The enterprise shall set up the "Accounts Receivable" account, and perform calculations according to the detailed accounts set by different purchase or accepting labor service units. For enterprises that do not have separate accounts in advance, accounts received in advance are also accounted for in accounts receivable.

The borrower registers the increase in the accounts receivable, the lender registers the recovery of the accounts receivable and the bad debt loss (ie, the decrease); the ending balance is on the debit side, indicating that the enterprise has not yet recovered the accounts receivable; if the balance is on the credit side, it indicates Payments received in advance by the enterprise.

Accounting

(1) Accounts receivable arising from daily business

The accounts receivable formed by the enterprise for the sale of goods and providing services shall be debited to the "Accounts Receivable" account, credited to the "Main Business Income" or "Other Business Income" account, and shall be paid in accordance with the tax law. The value-added tax output tax is credited to the account "Taxes payable ---- VAT payable (output tax)", and when receiving the receivables, according to the recovered amount, debit "bank deposits" or "inventory "Cash" account, credit "Accounts Receivable" account.

Example: When selling an item:

Borrow: Accounts receivable

Loan: main business income

Taxes payable-VAT payable (output tax)

When recovering money:

Borrow: bank deposit

Credit: Accounts receivable

(2) Accounts receivable in the case of commercial discounts

Commercial discounts refer to the deductions given by companies on the price of goods according to market supply and demand or for different customers. It is one of the most commonly used promotion methods for enterprises. In the case of a commercial discount, the receivables incurred by the enterprise shall be recorded at the amount after deducting the commercial discount. At the same time, when calculating VAT, the amount after deducting commercial discounts should be used as the tax basis, that is, commercial discounts have no effect on accounting.

E.g:

Company A sells a batch of products, the amount indicated on the price list is 30,000 yuan (excluding tax), and a 10% commercial discount is given to the buyer at the time of sale. The payment has not been received. Company A is a general taxpayer and uses value-added tax. The tax rate is 16% (the previous example is for reference only, and the tax rate has changed now). The accounting process is as follows:

Borrow: Accounts receivable 31320

Loan: Main business income 27000

Taxes payable-VAT payable (output tax) 4320

(3) Accounts receivable under cash discount

Cash discount, also known as sales discount, is a price concession provided by companies to urge customers to pay for their goods as soon as possible.

The cash discount is generally expressed as "a / A, b / B, n / C, a, b is the discount percentage; A, B is the discount period. For example, company A sells goods to company B for 30,000 yuan, and the payment terms are" 2/10, n / 60 "means that if company B pays within 10 days, it only needs to pay 29400 yuan, if it pays within 11-60 days, it needs to pay the full amount of 30,000 yuan".

For sales companies, cash discounts have two positive meanings. One is to shorten the collection time and the other is to reduce the loss of bad debts. The side effect is to reduce cash flow. Therefore, it must be reflected in accounting. There are three ways to calculate cash discounts: total price Law, net price method and allowance method (contents are not repeated here).

For example: Company A sells a batch of goods at a price of 50,000 yuan and value-added tax of 8,000 yuan. In order for the buyer to repay as soon as possible, the cash discount condition specified by enterprise A is "2 / 10,1 / 20, n / 30" (cash The discount does not include VAT) and the accounting is processed as follows:

(1) At the time of sales: For details, please refer to (1)

(2) If the above payment is received within 10 days:

Cash discount = 50000 * 2% = 1000 yuan

Borrow: bank deposit 57000

Finance costs 1000

Credit: Accounts receivable 58000

(3) If the above payment is received within 11-20 days:

Cash discount = 50000 * 1% = 500 yuan

Entry is the same as (2)

(4) If the above payment is received within 21-30 days, the cash discount is zero:

Borrow: bank deposit 58000

Credit: Accounts receivable 58000

Due to various reasons, a part of the accounts receivable cannot be recovered, and bad and bad debts are formed, which directly affects the economic benefits of the enterprise. Corresponding accounts management, the fundamental task is to formulate the company's own moderate credit policy, strive to reduce costs, and strive to obtain the maximum benefits, so as to ensure the security of accounts receivable and minimize the risk of accounts receivable. How to strengthen the management of accounts receivable and effectively prevent risks? I think the following measures should be taken:

I. Raising awareness and firm determination to control bad receivables. A virtuous asset cycle is a basic condition for the survival and development of an enterprise. Due to difficulties in realizing assets, a large number of accounts receivable that cannot be repaid on time has gradually become the most common cause of corporate bankruptcy. With the establishment of China's modern enterprise system, especially The commercialization of banks is in place, and this trend is bound to develop further. Bad accounts receivable can not only cause the deterioration of financial conditions, but also endanger the production and development of enterprises. In view of this situation, enterprises need to improve their scientific understanding of corresponding accounts management and control bad accounts receivable to a minimum level.

2. Improve the management system and establish a system guarantee system to control bad receivables. The first is to establish a credit evaluation system, that is, what conditions can a construction unit meet to meet the credit standards and conditions that can be funded. The second is to establish a comprehensive contract management system, make clear provisions on the payment methods, return methods, return periods, and liabilities for breach of contract by the construction unit to enhance legal awareness. The third is to establish a liability system for accounts receivable, which clearly specifies the responsible unit and responsible person. The fourth is to establish a reasonable reward and punishment system, and use it as the main indicator and performance indicators of the economic responsibility system and assessment indicators for leaving the audit. The fifth is to establish a receivables analysis system, analyze the current status and development trend of receivables and the implementation of the system, and take timely measures to control.

3. Implement the whole process control to prevent the occurrence of bad receivables. Corresponding to the control of account receivables, there are two main stages to be controlled: the first is the bidding and contracting stage of the project. Serious investigations and studies on the quality, repayment ability, and financial status of the owner, and analysis of its macroeconomic policies, issuance The feasibility study report evaluates the credit status of the owner and makes a decision on whether to advance funds. The second is the project's performance process. The project's performance process must establish a collection responsibility system, identify specific responsible personnel, promptly urge the owner to perform according to the contract and pay attention to changes in credit standing. On the other hand, for internal performance, such as quality, Whether the construction period and settlement are in accordance with the contract, through analysis, if there is a bad trend, measures should be taken in time to recover the losses and prevent disguised advances.

4. Organize special forces to clean up the formed accounts receivable. Due to the blind investment and government projects under the planned economy, construction companies have formed a large number of accounts receivable. In the current market economy, efforts must be made to clear the collection of debts due to collection of debts. Develop corresponding systems and adopt corresponding management measures. For the normal accounts receivable that have occurred, according to different situations, under the allocation and coordination of the person in charge of the unit, carry out distinguishing and focused work to clear the debts, strengthen the reconciliation, and strive to recover the funds as soon as possible; The collection of debts should be strengthened to clear the debts and take measures such as paying off debts with debts and forcibly collecting profits; for bad debts that have been generated for many years, if there is no result after clearing the debts repeatedly, it can be linked to economic benefits and clearing the commission. Measures; for those debt units that have a certain ability to repay, pay little attention to, and are not active in repaying the arrears, and use various excuses to excuse the non-repayment debt units, appropriate litigation methods should be adopted to enforce recovery by legal means.

The main work of a credit management manager in recovering receivables is not only to reduce bad and bad debts, but also to balance profits and risks and increase the return on capital. Bad and bad debts are not necessarily bad things. There are risks to rewards.

With the global economic slowdown, the shortage of corporate funds has become a common phenomenon. According to LINKED-F data from Platinum Consulting, credit sales, a business model that expands business by financing customers, is gradually becoming a trend. However, credit management is by no means a simple risk control. Rather, through control, transactions that could not be concluded due to excessive risks can be carried out smoothly. Credit managers are a group of people chasing return on investment and balancing risk and profit. ^[3]

The management of corporate accounts receivable includes the establishment of accounts receivable accounting methods, determination of the best opportunity account cost of accounts receivable, formulation of a scientific and reasonable credit policy, strict management of credit sales procedures, adoption of flexible marketing strategies and collection policies, and strengthening of accounts The daily management of the receivables and other aspects.

Focus on credit investigations

Credit investigation of customers is an important part of daily management of accounts receivable. Enterprises can check the customer's financial statements, or according to the customer's credit information provided by the bank, to understand the customer's creditworthiness, debt repayment ability, degree of capital protection, whether there are sufficient collaterals or guarantees, and production and operation aspects. Circumstances, and then determine the customer's credit rating as a basis for deciding whether to provide credit to customers.

Controlling credit sales

Controlling the amount of credit sales is an important means to strengthen the daily management of accounts receivable. Enterprises determine the amount of credit sales based on the customer's credit rating and grant different credit sales limits to customers of different levels. The accumulated amount must be strictly controlled within the risk range acceptable to the enterprise. In order to facilitate daily control, the enterprise shall record the determined credit sales quota on the account receivable details of each customer as a precautionary point for the balance control.

Reasonable collection strategy

The account collection strategy of accounts receivable is an effective measure to ensure the return of accounts receivable. When customers violate credit, companies should take effective measures to collect accounts. If these measures are not effective, they can resort to the court and pass legal channels. To resolve, but do not use legal means easily, otherwise the customer will be lost.

In addition to the management of the above aspects, there are some measures for the receivables that have occurred, such as tracking analysis of accounts receivable, aging analysis of accounts receivable, analysis of the current rate of accounts receivable, and establishment of accounts receivable. The bad debt provision system for account receivables is also an important part of corporate accounts receivable management.

Before a credit sales company collects its accounts, it should perform a tracking analysis on the operation process of its account collection. Whether a dealer can strictly fulfill the credit conditions of a credit sales company depends on two factors: one is the credit quality of the dealer; the other is the customer's cash holdings and adjustments (such as the binding of cash use, other short-term debt Repayment of cash requirements, etc.). If the customer's credit quality is good, holding a certain amount of cash, and the cash expenditure is less restrictive, the degree of adjustable agents is greater, and most of the customers are unwilling to default on the credit of the credit sales company at the cost of losing market credibility. If the customer's credit quality is poor or the cash is poor, or the degree of cash adjustment is low, it is inevitable that the credit of the credit sales company will be in arrears.

Based on the tracking analysis of the corresponding accounts receivable, the age analysis of the accounts receivable is also performed. Generally speaking, the longer the overdue time, the more difficult it is to collect debts, and the more likely it is to become a bad debt. The ageing analysis of accounts receivable is to examine and study the ageing structure of accounts receivable. The so-called ageing structure of accounts receivable is the proportion of the balance of many accounts receivable to the total balance of accounts receivable. The shorter the use time, the greater the possibility of recovery, that is, the relatively small degree of bad debt loss. Conversely, the greater the difficulty of recovery and the possibility of bad debt losses. Therefore, for customers with different arrears and customers with different credit qualities, the company adopts different collection methods to formulate different collection policies and collection plans that are economically feasible, and it is necessary to have some advances for possible bad debt losses. Prepare and fully estimate the impact of this factor on corporate profits and losses. For receivables that have not expired, management and supervision cannot be relaxed to prevent new arrears.

Due to the asymmetrical contradiction between the current cash payment requirements of the enterprise and the current account receivables, and the difference between prepayment and lag (for example, the enterprise must pay VAT related to credit sales income in cash) And income tax, make up for account receivables, etc.) This determines that the enterprise must take the degree of receivables as the necessary control standard, that is, the rate of receivables. The cash receivables guarantee rate is to meet the needs of the matching relationship between cash receipts and expenditures of enterprises. The effective cash receivables accounted for the total percentage of accounts receivable is the minimum ratio that the two should maintain. The index of the cash receivables guarantee rate of accounts receivable reflects the minimum guarantee level that the amount of overdue cash payments in a given accounting period after deducting various reliable and stable sources must be made up by the effective cash receivables. The significance is that it is not important for the company whether or not bad debt losses may occur in the future for receivables. What is more critical is whether the actual cash receipts can meet the required cash payment requirements for the same period, especially to meet binding tax liabilities. And repay due debts that cannot be extended or adjusted. The enterprise should regularly calculate the actual rate of receivables to see if it has reached the established control standard. If it is found that the actual rate of receivables is lower than the guarantee rate of receivables receivables, it should find out the reasons and take corresponding measures to ensure The company has enough cash to meet the cash payment requirements for the same period.

No matter what strict credit policy the enterprise adopts, as long as there is commercial credit behavior, the occurrence of bad debt losses is inevitable. Generally speaking, there are two main criteria for determining bad debt losses:

First, due to the bankruptcy or death of the debtor, the receivables still cannot be recovered after the debtor's bankruptcy property or estate has been settled.

The second is that the debtor has not fulfilled its debt repayment obligations overdue and has obvious characteristics indicating that it cannot be recovered. As long as the company's receivables meet any of the above conditions, they can be treated as bad debt losses. It should be noted that when an enterprise's receivables have been lost as bad debts in accordance with the second condition, it does not mean that the enterprise has waived its right to claim the receivables. In fact, the enterprise still has the statutory right to continue to receive payments, and the debt and debt relationship between the enterprise and the debtor will not be cancelled because the company has dealt with bad debts. Since bad debt losses of accounts receivable are unavoidable, it is extremely important to follow the principle of prudence, estimate the possibility of bad debt losses in advance, and establish a reserve system to make up for bad debt losses. Accounts receivable that are truly uncollectible are classified as bad debt losses after obtaining relevant party certification and approval in accordance with prescribed procedures. Accounts receivable that cannot be recovered due to the debtor's failure to perform its debt repayment obligations for more than 3 years It is also classified as bad debt loss, and the bad debt reserve is written off.

Tracking evaluation of accounts receivable

Once the accounts receivable is formed, the enterprise must consider how to collect the arrears in full and on time instead of waiting for the other party to pay negatively. The account receivables held should be dynamically tracked and analyzed frequently. To strengthen daily supervision and management, it is necessary to timely understand the operating conditions and solvency of the credit sellers, and whether the customer's cash holdings and adjustments can meet the needs of cashing. The enterprise may require customers to provide guarantees if necessary.

Strengthen the sales management of sales personnel

Sales staff should have the following habits: one week before the payment recovery period, call or visit the customer to predict the settlement date; determine the settlement date with the customer three days before the recovery period; be sure to notify or visit on time on the settlement date. When formulating a marketing policy, an enterprise should incorporate the management of accounts receivable into the evaluation of sales personnel, that is, personal interests must not only be linked to sales, but also be linked to the management of accounts receivable.

Reconciling regularly to strengthen the collection of receivables

To form a regular reconciliation system, the account must be checked with the customer every three months or half a year, and the errors in the documents and the amount due to the product variety, repayment period, return of goods and other reasons must be verified. The overdue accounts receivable should be queued and analyzed according to the age and amount of arrears to determine the object of priority collection. At the same time, it should be clarified whether the debtor's delayed repayment is intentional arrears, and the intentional arrears should be considered for recovery through legal channels.

Control the occurrence of accounts receivable and reduce the risk of corporate funds

In purchase and sales activities, it is necessary to reduce credit sales as much as possible. Generally, it is better to take a reduced price sale than to choose a large amount of credit sales. Enterprises can choose: the buyer's acceptance bill payment scheme; the payment recovery guarantee scheme and the accounts receivable risk comparison option scheme. In short, the frequency and amount of receivables should be minimized to reduce the risk of corporate funds. Under normal circumstances, customers should be required to pay off their previous arrears before new credits are allowed. If the arrears are found to be overdue or the amount of arrears is increased, the enterprise should take decisive measures to notify the relevant departments to stop supply.

Accrual of impairment provisions to control corporate risk costs

According to the requirements of the current accounting standards and accounting systems, according to the requirements of the principle of prudence, enterprises should check the accounts and inventories at the end of the period or the end of the year, reasonably estimate the possible losses, and accrue all possible asset losses. Impairment provisions and bad debt losses in order to reduce corporate risk costs.

Establish and improve the company's internal control system

A sound internal control system is the basic prerequisite for controlling bad debts, and its contents should include: establishing a sales contract liability system, that is, a sales contract should be signed for each sale, and the relevant payment terms should be clearly stated in the contract; establishment of credit sales approval Functional authority, internally stipulated credit sales quotas that can be approved by salespersons and business supervisors, and rank management systems above the limit that must be approved by leaders; establish a responsibility system for payment and return of goods, which can take who is responsible for collection and evaluate Its job performance. In short, enterprises should improve the internal control system of accounts receivable for each link in the credit sales business, and strive to form a set of standardized procedures for ex-ante, ex-, and ex-post control of accounts receivable.

When an enterprise has a good investment opportunity, but at this time, because many receivables are not recovered in time, and there is not enough funds, it can use the receivables for financing. There are four main ways:

1. Securitization of accounts receivable:

According to the specific requirements of their own financial characteristics and financial arrangements, companies can use securitization to provide securitization financing for receivables, and use securitization to provide an asset financing method that matches the repayment period of their assets.

1. Prevent long-term account receivable:

Accounts receivable arising from an enterprise's sale of goods on credit should have been recovered in a timely manner. However, in order to occupy the payment due for a long period of time, the purchaser of the sales company and the sales and accounting staff of the sales company seek to obtain benefits from the purchaser and seek long-term arrears of goods and miscellaneous freight, which causes the company to receivable the sales.

For example, a salesperson of an enterprise learns that a purchase unit intends to purchase 1 million yuan of fertilizer, but because the funds cannot be raised for a while, the payment time needs to be delayed. After conspiring with the sales and accounting staff, the sales staff decided to ask the purchase unit for a fee of 50,000 yuan to extend the collection, which led to the long-term account receivables, and 50,000 yuan fell into the private pocket.

2. Prevent artificial adjustment of accounts receivable and control corporate profits:

In the enterprise that uses the allowance method to account for bad debt losses, the accrual of bad debt losses shall be calculated and withdrawn after the year-end receivable balance is multiplied by a certain percentage and compared with the credit balance of the bad debt reserve account. Some companies do not change the accounts receivable In the case of the balance of the payment, the method of artificially raising or lowering the percentage of withdrawal of bad debts is adopted, and more or less of bad debts are provided to adjust the current profit.

Enterprises that use the allowance method to account for the loss of bad debts, in order to adjust the profit and loss, inflated or reduced management expenses. In addition to increasing or reducing the ratio of the provision for bad debts, they also adopted methods of increasing or reducing the amount of receivables. Make more or less provision for bad debts.

For example, the performance of an enterprise was very good that year, but in order to set aside for the task, the company leader artificially increased the unreceivable balance of the year, withdrawing more bad debt reserves and accounting for management costs; lowering the profit for the year. On the contrary, in order to increase the ranks of some officials, some enterprise leaders boasted, reduced the balance of accounts receivable at the end of the year, reduced the provision for bad debts, reduced management costs, and raised their profits for the year.

3. Prevent the use of accounts receivable and set up a small vault:

According to relevant state regulations, companies can borrow funds from each other, but some companies use receivables to lend and transfer interest income into "small vaults", which are called inter-company loan funds.

For example, the enterprise will directly repay the repayment of the loan to other units, and transfer the interest income obtained to the "small treasury". When the enterprise receives the arrears from the foreign unit, it does not remit the bank journal, and simultaneously issues a transfer check of the same amount, which is lent to another unit for payment, and does not count the bank journal for the bank deposit paid. The two business combinations are recorded as:

Borrow: Accounts receivable-B

Credit: Accounts receivable-A

No interest is recorded after interest is collected, and it is transferred to the "small treasury".

4. To prevent false listing of accounts receivable and false increase in sales income:

In order to reflect the business performance or complete the contracting task, the company will artificially list the sales income, current accounts, and false profits at the end of the year. Wait until the beginning of the next year, and then use the red letter to write off this false account. For example, when reviewing the detailed profit statement of a company's merchandise sales, it is found that the company's gross profit margin in December is several times higher than that of other months. After detailed review, it is found that a company's sales revenue has not been carried forward and the corresponding application should The name of the account for collection of accounts was verified by letter and no such unit was found. After questioning the financial staff, I realized that it was a false increase in revenue at the end of the year by the company leader in order to complete the contracting task.

5. The recorded amount of accounts receivable is not true:

In the presence of cash discounts, the accounting of receivables is accounted for in the total price method and the net price method. According to the regulations of China's accounting system, only the total price method is allowed for accounting. However, in actual work, it may occur that the accounting is based on the net price method. This result will result in the enterprise not recording normal income and objectively causing the account receivables to be incorrect. This will create opportunities for some criminals to embezzle. .

For example, the credit policy adopted by a furniture store for sales is 2/10, 1/20, and N / 30, but it calculates sales income based on the net price method, which will underestimate the revenue and affect the profit calculation.