- Posted by BTB
- On June 12, 2020
- 0 Comments
I don’t know what is happening but invoices are going missing during COVID-19. I got the calls and quickly jumped on the case. I am feeling like a detective. Do you hear the music in your head? Can you imagine me in a trench coat and Fedora?
Client #1 is all upset. Almost frantic. “The sales don’t reconcile to the report I am sending to corporate. Where could they have gone?”
Detective Kim: “Have you checked to make sure everything is posted to the General Ledger?”
Client #1: “Sure have. Everything is there. I am confused.”
Detective Kim: “Okay. Who is doing the invoicing? Is it the same person as usual?”
Client #1: “Well, now that you mention it, we do have someone else doing invoicing. There are a few job reassignments during COVID-19.”
Detective Kim: “Hmmm. That makes some sense. There is a setting when printing invoices that transfers the invoices to Accounts Receivable. If the box isn’t checked, it’s like the invoices are sitting in a folder hidden in someone’s desk.”
Client #1: “Well that sounds scary. What can I do?”
Detective Kim: “Have you run the Copy Invoices from Manufacturing routine?”
Client #1: “The Copy what?”
Detective Kim: “Copy Invoices from Manufacturing. This takes any invoices sitting in limbo and moves them into Accounts Receivable. It is really slick. The step is on the month-end checklist. It’s a good practice. Takes seconds to do and will give you the assurance that you have all the sales.”
Client #1: Sheepishly the client states, “Well, I guess I must not have seen it on your checklist.”
Detective Kim: “No worries. Let’s run it now.”
Client #1: “Okay. Let’s do it.” We went to Accounts Receivable Invoice Entry screen and ran the process. “Look, there are 60 invoices updated. Thank goodness. That should make things better.”
And sure enough it did. Mystery solved. Another case down in the books.
A week later another case and this dame comes into my office. Okay, that isn’t really how it happened. I must be watching too many old detective movies. Here’s what happened. I got the email from a lovely lady and she said: “I presented financial statements to the big guys and they don’t believe the results.”
We set up a meeting to get to the bottom of this.
Detective Kim: “Let’s look at your statements. Sales look a wee bit low. But wow, look at the Cost of Sales. Something is definitely up.”
Client #2: “Well, I have already checked that everything is posted. I compared the Accounts Receivable postings to the General Ledger and they are the same.”
Detective Kim: “Since the Cost of Goods Sold seems high, let’s have a look at the Gross Profit Report from Post Manufacturing Journals.” We popped over to that window and ran the report. We scrolled through the pages. We were a few pages in and saw an order with 0 revenue for the month but with costs. We looked at the order to date and those numbers looked okay. Hmmm. Didn’t quite add up.
Detective Kim: “Could there be any costs being added after an order is fully shipped?”
Client #2: “There could be some costs but nothing with dollars that big.”
We continued scrolling and saw a few more and a few more. We certainly had a trail of clues. At that point, we jumped into Customer Inquiry to look at one of the orders. We looked at the View Shipments & Invoices option; we could have used the Document Life Cycle too.
Detective Kim: “Hey those invoices were shipped in May, but the invoice looks to be dated June.”
Client #2: “I am pretty certain I selected the correct date printing the last invoices for the month, but based on what I am seeing that isn’t the case.”
Detective Kim: “Well let’s go look at those invoices in Accounts Receivable.” This is where there was another twist. “Hey, that invoice has a posting date of December but an invoice date of June. Was June closed when you printed the invoice?”
Client #2: “Sure was.” Said very proudly. “We accountants like to have control over things. I don’t open it up until I complete the invoicing.”
Detective Kim: “Could December have been open?”
Client #2: “Yes. I was working on the year-end entries.”
Detective Kim: “Here’s what happened. Since June was closed Visual looked for an open month to post the invoices. Since December was open, that is where they went.”
Client #2: “Well what do we do now?”
Detective Kim: “No problem, all you need to do is to change the posting date on the AR invoices. Good news is there are less than 20. Won’t take long”
Sure enough within 5 minutes, they were fixed and posted to the general ledger. The statements were fixed and the big guys, I am sure will be much happier.
I got back to my office. Okay I was already in the office. Not going anywhere. But all these missing invoices reminded of a case a few years ago. Similar concept. Some sales missing but it was a different case altogether.
With this Visual ERP client, there were goods shipped but NO INVOICE AT ALL. So what happened? Well, we looked at the packlists and found they were not approved. Did you know only “Approved packlists can be invoiced?” Different people can have different statuses. This series of packlists were set as “Shipped” not “Approved”.
Again, easy fix. The packlist was selected and the status was changed to Approved. Once that was done the invoices could be created. Whew. We missed a bullet there.
Notes from the Accounting Detective’s Handbook
Thought we would recap a few steps that will help get all the invoices created and posted into the correct month.
- Run Copy Invoices from Manufacturing as part of the month-end process. Get your step-by-step month-end checklist from backtobasics.ca
- Ensure the box is checked for creating Accounts Receivable invoices in the Invoicing screen.
- Have the invoice date setting to use the Shipped Date. That will make sure the sales go into the correct month which will ensure the Sales & Cost of Sales are in the same month. You know – that proper matching principal.
- Ensure all packlists have been invoiced. Check for any packlists with a status other than Approved and that they have been invoiced.
This ends this session of the Accounting Detective. Stayed tuned for another installment in the near future.