ACCOUNTS RECIVABLE CONTROLS

1
ACCOUNTS RECIVABLE CONTROLS

• Please note the following controls are broad and
  with the assumption that accounting system is
  either manual or automated systems.

2
A / R CONTROLS

• 1- General Controls.
• Segregation of Duties. In order to effectively
  segregate responsibilities for authorization,
  custody, and record keeping for processing of
  accounts receivable transactions, the following
  functions are segregated
• Receiving
• Cash receipts
• Credit
• Billing
• Accounts receivable

3
A / R CONTROLS

• 2- Other Controls
• Pre-numbered Forms or electronic numbering for
  the following
• Sales return memos
• Credit memos
• Invoices
• Write-off memos
• Journal vouchers
• Documentation of, customer credit files, sales
  journal, aged trial balance, accounts receivable
  subsidiary ledger, sales return memos, and
  remittance advices (receipt)

4
A / R CONTROLS

• 2- Other Controls (continued)
• Authorization and Approval for the following
• Postings to the accounts receivable
• Sales, remittances by advices received from
• cash receipts
• Sales returns
• Write-offs by write-off memos prepared by
• the credit manager and approved by the
  treasurer
• Ageing of accounts receivable
• Independent approval of sales return
• Independent approval of write-off memos.