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Your Accounts Receivable Ledger
If your business sells to customers on credit, then you should
have a separate accounts receivable ledger. Customers receiving
credit should each be assigned a page (or pages) in the ledger,
and their names should be arranged alphabetically.
The following is a sample page from an accounts receivable ledger.
This type of ledger is inexpensive to buy and is available at most
stationery stores.
Customer Name: Customer, John
Address: 1604 Pine Street, Anywhere, AB.
Phone: 123-4567
Credit References: Main Bank
Credit Limit: $500
| Date |
Reference |
Charges |
Credit |
Balance |
| October 14, 1995 |
Invoice #7145 |
110.00 |
|
110.00 |
| November 2, 1995 |
Credit return |
|
12.00 |
98.00 |
| December 5, 1995 |
Invoice #7216 |
342.00 |
|
440.00 |
| December 31, 1995 |
Cheque #924 |
|
200.00 |
240.00 |
Each customer's name, address, telephone number, credit references,
and credit limit should appear clearly at the top of each page.
A credit limit is set to ensure excessive amounts of credit are
not given.
The rest of the page is used to record the credit business you
have conducted (and are conducting) with this customer. In this
example: the customer charged $110 on October 14, returned $12 of
the merchandise on November 2, charged an additional $342 on December
5, and mailed a payment cheque for $200 on December 31. This left
a balance owing of $240.
Each month your accounts receivable should be "aged"
according to the date of the invoice. This means that each of your
customer accounts should be listed according to the amounts owing
in the current (1-30 days), over 30 days, over 60 days, and over
90 days categories.
This will immediately show you which accounts are overdue and which
require extra follow up. If you are using accounts receivable as
security for a line of credit from a chartered bank, the bank will
almost certainly request an aged list of accounts receivable each
month.
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