Find Money FAST - Customer Credit and Accounts Receivable

Especially during tough economic times, it is important to identify and manage potential customer credit risks, before those risks turn into bad debts and write-offs. ACL helps test open customer invoices and accounts receivable sub-ledger for early warning signs of customer credit and revenue leakage problems, including trends of past-due balances, short-paid invoices and unauthorised discounts and/or credit notes.

1. Examine Accounts Receivable:

• Profile of unpaid invoice data by invoice date. Aging process by invoice date reports number of invoices outstanding and totals.
• Profile of unpaid invoice data by due date. Aging process by due date reports number of invoices outstanding and totals.

2. Examine sale price data to identify possible unauthorised customer discounts:

• Profile AR transaction (sales) data and identify unit price variances by product code. Identify transactions where price variance exceeds X% and profile the results by product, vendor, office.

Facts & Figures

The average auto write-off tolerance (the difference between payment amount and invoice amount that is accepted without further review) for large companies is $92 per invoice [IOMA 2008].