Understanding the Receivable Document

Here is a list of important concepts that help you understand the receivable document:

• Types of Receivable documents

  There are two types of receivables:

  • Regular receivable - This is the default receivable type and typically results in the generation of an invoice or statement to bill customers.  A regular receivable is eligible for the accrual of finance charges and other collection actions.

  • Summary receivable - This type of receivable is most often used to record Accounts Receivable information maintained in systems external to Advantage Financial. No bill is generated and a summary receivable is not eligible for finance charge accrual or automatic netting or collections.  (For more information about netting, see Handling Automatic Netting and Credit Balances.)

  Both types of receivables are entered into Advantage Financial using the same Receivable (RE) document; summary receivables are indicated by a flag on the Receivable document.

• Accounting event types supported by the Receivable document

  Receivable Event Types

  Accounting entries made by processing a receivable can vary, depending on the event type coded.  The Receivable (RE) document supports five event types:

  • Billed Earned Revenue

  • Billed Unearned Revenue

  • Billed Deposit

  • Billed Vendor Refund - Budgetary

  • Billed Vendor Refund - Non-Budgetary

• Billing for Earned and Unearned Revenue and to Record a Deposit

  You would create a regular receivable without a reference to record earned or unearned revenue, or to bill for a deposit.  

  This activity ...	Results from ...	Additional comments ...
  Recording earned revenue	An entity substantially accomplishing the requirements needed to be entitled to the benefits of revenue that will eventually be received	Most common use of the Receivable (RE) document.
  Recording unearned (advanced) revenue	An entity that has not yet substantially met the requirements necessary to be entitled to the benefits of revenue that will be received.	Although commonly treated as a liability, the system can update revenue budgets to reflect unearned revenue based on the user-defined setup.
  Recording a deposit	Billing for a deposit payment, such as a security deposit on rental property.	Deposits are similar to unearned revenue in that they are a liability.  However, billed deposits will not update revenue budgets because it is not anticipated that they will be retained.

• Bill for a vendor for a refund

  At certain times, you may need to bill a vendor for a refund due to a mistaken overpayment to the vendor, or when an incorrect amount of goods are received after payment has been made. There are two ways for choosing the event type to be used on the Receivable (RE) document in this situation, depending on your entity’s business practices.    

  The two event types available for billing a vendor for a refund are:

  • Billed Vendor Refund - Budgetary

  Use this event type when you want to reduce expenditures immediately at the time the receivable is processed.    

  • Billed Vendor Refund - Non-budgetary

  Use this event type to credit the expected refund to a holding account. Expenditures will continue to reflect the actual amount paid to the vendor, and budget authority will not be freed up until the refund is actually received.  

• Using a Summary Receivable

  Use a summary receivable to record accounts receivable information maintained in separate systems outside Advantage Financial.  Summary receivables are used to facilitate budget control and for reporting.  They help you link processes occurring outside the Advantage Financial system to the overall revenue management numbers tracked within Advantage.

  When you are entering a summary receivable, the suppress indicator on the Receivable (RE) document is automatically set to Yes for both finance charges and billing so that finance charges are not applied, and billing does not occur.  Summary receivables are also not normally subject to the automatic netting process.  

  You can create summary receivables for all of the various customer/vendor types. However, if you enter a regular customer code and a billing profile code within the summary receivable, the receivable will be subject to the automatic netting process.