My client, Amelia, owns an architecture design business and has hired AccuraBooks to do two things:

  • Maintain the bank/credit card reconciliations on a monthly basis.
  • Maintain the “back-office” Accounts Receivables.

Amelia desires to always maintain the “front-office” Accounts Receivables by creating the invoices herself and submitting them to her clients, then later on she will apply the payments, via the “front-office” Accounts Receivables software she is utilizing.

Amelia’s handling of Accounts Receivables presented an interesting challenge for AccuraBooks because Amelia really has no desire to maintain anything within the “back-office” bookkeeping software, but yet still wants Accounts Receivables ALSO maintained in the back-office software (just like she does for the front-office software).

Amelia’s reasoning here is that she wants accurate overall financial statements for the company on a monthly basis but does not desire to use this same back-office bookkeeping platform for her daily financial tasks.

So, the solution I came up with was as follows:

  1. Update all banks/credit cards on a monthly basis and reconcile.
  2. Leave any customer deposits (that cleared the bank) in an uncategorized account on a temporary basis.
  3. Log in to Amelia’s front-office Accounts Receivables software and obtain a report that shows all customer payments that she applied to open invoices for the month (the month being reconciled).
  4. Use this customer payments information to then (back in the back-office software) apply each uncategorized deposit to the correct customer’s profile and invoice that was paid.

Periodically, an Accounts Receivables account reconciliation should also be commenced between the front-office and back-office systems.

Note: the customer invoices within the back-office software do not have the same exact level of detail as the corresponding ones in the front-office Accounts Receivables software because it simply is not needed.

 

Note: AccuraBooks is a bookkeeping firm only, so please consult with your Certified Public Accountant or with a Certified Auditor for verification and clarification about the contents of this article.

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