Operational Analysis Questionnaire Accounts Receivable

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Document Control Change Record

Date

Author

Version

Change Reference

Reviewers

Name

Position

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No.

Questions

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1 1.1 1.1.1 1.1.2

Customer Management Customer Information Who maintains customer information? Do you default other information (payment terms, shipping, tax) at the Customer Level? Can this information be changed and updated at the time of invoice entry? Do you have a central registry of customers which supports more than one business units? What types of customers do you have? How do you group your customers for credit limits/credit checks? How do you group your customers for statements? How do you group your customers for interest charges for late payments? How do you group your customers for payment rules? How many customers do you have?

1.1.3

1.1.4

1.1.5 1.1.6

1.1.7 1.1.8

1.1.9 1.1.10

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No. 1.1.11 1.1.12 1.1.13 1.1.14

Questions What type of payment terms do you provide? Do you provide split term payment terms? Do you provide discount payment terms? Do you use customer agreements/contracts to manage specific price lists? Do you use customer agreements/contracts to manage specific discounts? Do you use customer agreements/contracts to manage specific payment terms? Do you use customer agreements/contracts to manage specific invoicing policies? How do you track customer contact people? Do you automatically number new customers as they are created? Do you automatically number customer business purposes as they are created? Do you track and record relationships between customers for example, franchises, subsidiaries, and so on? Do you create reciprocal customer relationships whenever you create a relationship between customers for tracking

Answers

1.1.15

1.1.16

1.1.17

1.1.18 1.1.19

1.1.20

1.1.21

1.1.22

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No.

Questions purposes?

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1.1.23 1.1.24 1.1.25

Do you send customer statements? Do you have multiple "remit to" addresses? How are multiple "remit to" addresses determined for each customer? What credit information is tracked for each customer? Do terms and conditions of customer agreements and/or payment terms change based upon the status of their accounts? How do you maintain/audit your customer data? Do you have a prospect system separate from the receivables customers? Who has access to your customer database? Do you have the same customers repeated multiple times in the data files or the same customer for different operating units? How do you track customers with different or multiple bill-to and ship-to addresses?

1.1.26 1.1.27

1.1.28 1.1.29

1.1.30 1.1.31

1.1.32

1.2

Sales

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No.

Questions

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1.2.1 1.2.2 1.2.3

How do you maintain and assign salespeople to customers? Do you track Sales Territory Information? How is Sales Territory Information for tracking purposes derived? (for example, customer, salesperson, and so on) Does your sales order cycle involve product shipment?

1.2.4

2 2.1 2.1.1 2.1.2

Billing Process Invoicing Please describe you invoicing process. How do you link the specific products/services that you sell with general ledger accounts at invoice entry? Do you regularly invoice customers for the same items? Do you use standard invoice lines with default pricing and default accounting information? Do you ever use invoice forms and/or the invoice entry process for transactions other than billing customers?

2.1.3 2.1.4

2.1.5

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No. 2.1.6 2.1.7

Questions Do you use Customer Account Credit Memos? How are Customer Account Credit Memos used? Why are Customer Account Credit Memos used? What items appear on Customer Account Credit Memos? Do you enter invoices in batches? How are batch invoices defined? Do you use batch controls, such as counts and amounts? What are the units of measure you use when you bill customers for products and/or services? Do you require taxes to be established for use when preparing invoices? Do you validate the tax rate against a Customers Ship To address when preparing invoices? Do you have any subsidiaries that bill customers in a foreign currency? Are there any other foreign currency issues regarding invoice generation? How many invoice types do you have? How frequently do you invoice your customers?

Answers

2.1.8 2.1.9

2.1.10 2.1.11

2.1.12

2.1.13

2.1.14

2.1.15

2.1.16 2.1.17

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No. 2.1.18 2.1.19

Questions How do you number your invoices? How do you receive notice to create/generate an invoice to bill a customer?

Answers

2.2 2.2.1

Project Billing Typically, how many project-related payments do you receive a month? Do you use standard invoice lines with default accounting information? Do you have any subsidiaries that bill customers in a foreign currency? Are there any other foreign currency issues regarding invoices and/or payments?

2.2.2

2.2.3

2.2.4

3 3.1 3.1.1 3.1.2

Payment Processing Payments Describe your cash applications process. Do you enter your payments in batches? How are batches identified?

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No. 3.1.3

Questions How do your customers generally pay invoices? (Single check, single invoice/single check, multiple invoices/multiple checks) Do you use batch control counts and amounts? Do you use more than one bank account and/or cash account? Do you have customers who pay other customers invoices? Do you use lockboxes? How many lockboxes do you use? Do you receive deposits and/or prepayments? Do you receive non-customer related payments? How are non-customer related payments accounted for? How do you handle payments without remittance information? What are your policies and procedures about adjusting payments? What are your policies and procedures about reversing payments? How many payments do you receive in a month? How many checks are returned by the bank in a period?

Answers

3.1.4 3.1.5 3.1.6 3.1.7 3.1.8 3.1.9 3.1.10 3.1.11 3.1.12 3.1.13

3.1.14

3.1.15 3.1.16

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No. 3.1.17 3.1.18 3.1.19 3.1.20

Questions What are the reasons for checks being returned by the bank? Who applies cash? How is cash applied? Do you create charge backs (Debit Items) for customer deductions?

Answers

3.2 3.2.1

Collections How do you enter/manage a credit amount owed to the customer by your company? How do you enter/manage a credit amount owed to your company by the customer What does your aging look like? Do you send dunning letters to customers? Do collectors actively call customers on delinquent items? What is the process for tracking actions to collect on delinquent accounts? Is the process for tracking actions to collect on delinquent accounts automated?

3.2.2

3.2.3 3.2.4 3.2.5 3.2.6

3.2.7

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No. 3.2.8

Questions Do terms and conditions of customer agreements and/or payment terms change based upon the status of their accounts? Do you monitor performance of your collectors? What metrics are used to monitor collections performance? Do you do cash-flow requirements forecasting? What sort of buckets do you use for cash-flow requirements forecasting? (For example, 30, 60, 90...)

Answers

3.2.9 3.2.10 3.2.11 3.2.12

3.3 3.3.1 3.3.2 3.3.3 3.3.4

Reconciliation Do you reconcile payments with the bank? How do you reconcile payments with the bank? How often do you reconcile payments with the bank? How are bank reconciliation errors handled?

4.0 4.1

Accounting and Period End Processing Revenue

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No. 4.1.1

Questions Do you ever recognize revenue from a single transaction over multiple periods? When do you recognize revenue? How many General Ledger revenue accounts do you distribute to? When do you create or recognize outstanding receivables? Do you distribute earned and unearned revenue? What are the GL accounts? Do you have unbilled receivables? Is revenue assignment associated with sales people information? Do you assign non-revenue credit to sales people? Do you have special revenue recognition for long-term agreements?

Answers

4.1.2 4.1.3

4.1.4 4.1.5

4.1.6 4.1.7

4.1.8 4.1.9

4.2 4.2.1 4.2.2

Period Close What is the process to open and close AR periods? How are adjustments to closed periods handled?

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No.

Questions

Answers

5 5.1

Reporting Reporting Please enclose a list of all reports used in the Account Receivable area Please annotate the report list with each report's name/number, description, the type of users, frequency on which these reports are generated.

6 6.1 6.1.1

Miscellaneous What else needs to be discussed?

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Issues and Action Items

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