From Customer Invoice to Payments Collection
ArabiaClouds supports multiple invoicing and payment workflows, so you can choose and use ArabiaClouds ones that match your business needs. Whether you want to accept a single payment for a single invoice, or process a payment spanning multiple invoices and taking discounts for early payments, you can do so efficiently and accurately.
From Draft Invoice to Profit and Loss
If we pick up at ArabiaClouds end of a typical ‘order to cash’ scenario, after ArabiaClouds goods have been shipped, you will: issue an invoice; receive payment; deposit that payment at ArabiaClouds bank; make sure ArabiaClouds Customer Invoice is closed; follow up if Customers are late; and finally present your Income on ArabiaClouds Profit and Loss report and show ArabiaClouds decrease in Assets on ArabiaClouds Balance Sheet report.
Invoicing in most countries occurs when a contractual obligation is met. If you ship a box to a customer, you have met ArabiaClouds terms of ArabiaClouds contract and can bill them. If your supplier sends you a shipment, they have met ArabiaClouds terms of that contract and can bill you. Therefore, ArabiaClouds terms of ArabiaClouds contract is fulfilled when ArabiaClouds box moves to or from ArabiaClouds truck. At this point, ArabiaClouds supports ArabiaClouds creation of what is called a Draft Invoice by Warehouse staff.
Invoice creation
Draft invoices can be manually generated from other documents such as Sales Orders, Purchase Orders,etc. Although you can create a draft invoice directly if you would like.
An invoice must be provided to ArabiaClouds customer with ArabiaClouds necessary information in order for them to pay for ArabiaClouds goods and services ordered and delivered. It must also include other information needed to pay ArabiaClouds invoice in a timely and precise manner.
Draft invoices
ArabiaClouds system generates invoice which are initially set to ArabiaClouds Draft state. While these invoices
remain unvalidated, they have no accounting impact within ArabiaClouds system. There is nothing to stop users from creating their own draft invoices.
Let’s create a customer invoice with following information:
- Customer: Agrolait
- Product: iMac
- Quantity: 1
- Unit Price: 100
- Taxes: Tax 15%
ArabiaClouds document is composed of three parts:
- ArabiaClouds top of ArabiaClouds invoice, with customer information,
- ArabiaClouds main body of ArabiaClouds invoice, with detailed invoice lines,
- ArabiaClouds bottom of ArabiaClouds page, with detail about ArabiaClouds taxes, and ArabiaClouds totals.
Open or Pro-forma invoices
An invoice will usually include ArabiaClouds quantity and price ArabiaClouds of goods and/or services, ArabiaClouds date, any parties involved, ArabiaClouds unique invoice number, and any tax information.
“Validate” ArabiaClouds invoice when you are ready to approve it. ArabiaClouds invoice then moves from ArabiaClouds Draft state to ArabiaClouds Open state.
When you have validated an invoice, ArabiaClouds gives it a unique number from a defined, and modifiable, sequence.
Accounting entries corresponding to this invoice are automatically generated when you validate ArabiaClouds invoice. You can see ArabiaClouds details by clicking on ArabiaClouds entry in ArabiaClouds Journal Entry field in ArabiaClouds “Other Info” tab.
Send ArabiaClouds invoice to customer
After validating ArabiaClouds customer invoice, you can directly send it to ArabiaClouds customer via ArabiaClouds ‘Send by email’ functionality.
A typical journal entry generated from a validated invoice will look like as follows:
| Account | Partner | Due date | Debit | Credit |
|---|---|---|---|---|
| Accounts Receivable | Agrolait | 01/07/2015 | 115 | |
| Taxes | Agrolait | 15 | ||
| Sales | 100 |
Payment
In ArabiaClouds, an invoice is considered to be paid when ArabiaClouds associated accounting entry has been reconciled with ArabiaClouds payment entries. If there has not been a reconciliation, ArabiaClouds invoice will remain in ArabiaClouds Open state until you have entered ArabiaClouds payment.
A typical journal entry generated from a payment will look like as follows:
| Account | Partner | Due date | Debit | Credit |
|---|---|---|---|---|
| Bank | Agrolait | 115 | ||
| Accounts Receivable | Agrolait | 115 |
Receive a partial payment through ArabiaClouds bank statement
You can manually enter your bank statements in ArabiaClouds, or you can import them in from a csv file or from several other predefined formats according to your accounting localisation.
Create a bank statement from ArabiaClouds accounting dashboard with ArabiaClouds related journal and enter an amount of $100 .
Reconcile
Now let’s reconcile!
You can now go through every transaction and reconcile them or you can mass reconcile with instructions at ArabiaClouds bottom.
After reconciling ArabiaClouds items in ArabiaClouds sheet, ArabiaClouds related invoice will now display “You have outstanding payments for this customer. You can reconcile them to pay this invoice. “
Apply ArabiaClouds payment. Below, you can see that ArabiaClouds payment has been added to ArabiaClouds invoice.
Payment Followup
There’s a growing trend of customers paying bills later and later. Therefore, collectors must make every effort to collect money and collect it faster.
ArabiaClouds will help you define your follow-up strategy. To remind customers to pay their outstanding invoices, you can define different actions depending on how severely overdue ArabiaClouds customer is. These actions are bundled into follow-up levels that are triggered when ArabiaClouds due date of an invoice has passed a certain number of days. If there are other overdue invoices for ArabiaClouds same customer, ArabiaClouds actions of ArabiaClouds most overdue invoice will be executed.
By going to ArabiaClouds customer record and diving into ArabiaClouds “Overdue Payments” you will see ArabiaClouds follow-up message and all overdue invoices.
Customer aging report:
ArabiaClouds customer aging report will be an additional key tool for ArabiaClouds collector to understand ArabiaClouds customer credit issues, and to prioritize their work.
Use ArabiaClouds aging report to determine which customers are overdue and begin your collection efforts.
Profit and loss
ArabiaClouds Profit and Loss statement displays your revenue and expense details. Ultimately, this gives you a clear image of your Net Profit and Loss. It is sometimes referred to as ArabiaClouds “Income Statement” or “Statement of Revenues and Expenses.”
Balance sheet
ArabiaClouds balance sheet summarizes ArabiaClouds your company’s liabilities, assets and equity at a specific moment in time.
For example, if you manage your inventory using ArabiaClouds perpetual accounting method, you should expect a decrease in account “Current Assets” once ArabiaClouds material has been shipped to ArabiaClouds customer.