Teacher Created Materials
June 17, 2015
I started working with Vanessa in Accounts Receivable in this fourth week. As I work in another department, my knowledge about the Accounting Cycle is again improving. When I worked with Sheila in A/P, we received invoices and sent out checks to vendors who we owe money. Now that I’m in A/R, our task is the other way around: we send out invoices to our clients who owe us and will receive checks back from them. It’s all connected! And when I work with Jared and his General Ledger Report, I will see the connection even more clearly.
But first I will talk about what I have done with Vanessa in A/R so far. Every morning, Vanessa’s first task is to check the bank account – whether all the checks she deposited the previous day are correct and balanced. After that, she reconciles all of TCM’s transactions from the previous day – whether the database is in balance with her data and the bank balance. I want to emphasize on the word “reconcile,” since it’s the key process of Accounting. Below is the definition I found on investopedia.com:
“Reconciliation is the key process used to determine whether the money leaving an account matches the amount spent, ensuring the two values are balanced at the end of the recording period.”
Basically it’s to check if the numbers equal each other , but it’s not that simple in Accounting. You will have a nice day if all the numbers you entered equal with numbers in the database. Otherwise, you might have an easy or a hard time finding out the wrong/different numbers. It will be easy if you enter the numbers you have into an Excel file and it’s not right – you can find it and replace it fairly quickly. However, if you enter the numbers incorrectly when you are keying the data into the database, it’ll be a bit troublesome. Sometimes you will not be able to delete the data you entered, therefore you have to reverse your data somehow. Or in a more simple case, if the check amount from your client doesn’t match the actual amount they have to send, you will have to do something about it. And it happens all the time – we’re humans, not robots, and mistakes/minor differences do come up occasionally. I have been doing the reconciliation for some mornings, which makes me feel pretty good (since the work I’ve done has balanced and there haven’t been any special cases).
After that, I mail out the invoices to the clients who made the transactions the day before. A more complicated task that relates to sending out invoices is to call the clients who haven’t made payments yet to our invoices. It might be simply because our client hasn’t received our invoice yet, or they forgot to pay it (we receive A LOT of invoices every day, so that’s understandable). Some situations are harder to solve when they include shipping fees, credit memos, duplicate copies, clients with a lot of locations, etc.
The last thing I do in the afternoon is to deposit the checks and credit card statements with Vanessa. The checks normally come in late in the afternoon, at around 2-3 p.m., and we have to deposit them before the bank is closed. I normally key in the database and deposit around 15 – 20 checks, but there was one rough afternoon that I had 85 checks. It’s a good sign for TCM though – they are selling a lot of products.
Tom is an Economics & Business major from Hanoi, Vietnam.