On Tuesday, I gave you an overview of the journal entry involved in the cash applications process.

http://faoblog.com/processes-ar-cash-applications-entries/

Let’s talk of the transaction components  today. Each remittance should comprise of:

  • Date of remittance
  • Remitter’s name
  • Remitter’s address / unit details
  • Amount
  • Details of exchange rate for international remittances
  • Bill / Invoice details
  • Date on which the good or service was sold
  • Date on which the good or service was delivered
  • Purchase Order details
  • Tax information – like TIN etc.
  • Details of any tax deductions from remittance
  • Details of any adjustments in the remittance
  • Details of discounts claimed / penalties paid, if any
  • Mode of remittance
  • Date of receipt acknowledgement, if any

Why I am listing these? Normally when payments are remitted by the customers directly to your client’s bank, they will not send all of these details, you may get only the name and address of the remitter.

I received a query that I was not following the usual accounts receivable sequence, why?

Primarily, my focus is more on the processes that can be outsourced or moved to a client back office. In the accounts receivable sphere, this is the first process that is normally outsourced from a back office, non-voice perspective. I will give a high level overview, when I am done with the cash applications piece.

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