January 19, 2015

COMMERCIAL Accounts Receivable Processing

Accounts Receivable Processing

Accounts Receivable, or Asset-Based, Processing is an optional component of the commercial system. Accounts Receivable processing takes advantage of a variety of functions to allow you to establish and maintain these loans.

The Accounts Receivable Subsystem utilizes four main functions: commitment accounting, loan accounting, collateral accounting, and reporting. As a whole, all system capabilities exist for the Accounts Receivable subsystem.

In addition to the establishment of a customer record and a major commitment for tracking Asset-Based lending relationships, a revolving minor commitments must be established and carry the appropriate information to identify the A/R code, the associated number of float days, and the calendar days to designate processing monetary activity.

All required balance information is maintained on various collateral records, i.e., discount, collateral balance, letter of credit, cash collateral, and ineligible collateral. The Financial Receivables function will be used to debit and credit Accounts Receivable records, as well as the Loan Balance (advances and payments).

Accounts Receivable information is readily available through the Customer Worksheet, which provides a lending officer with the necessary information to make a decision on advancing funds to the customer. It shows the detail for each loan and rolls up to the major commitment detail and customer totals.

The commercial system also provides the following information:

  • Periodic Transaction Report – details transaction history for the loans by posting date with subtotals after each posting date.
  • Collateral Statement – a month-end report detailing all activity affecting the collateral balance and cash collateral balance, as well as statistical and turnover information for the collateral.
  • Turnover Analysis – a historical accounting of the loan and collateral. Thirteen months of summary accounting are provided to include turnover calculations on both the collateral and loan.
  • Receivables List – provides a complete view of the collateral position of the loan, with calculations illustrating available collateral for the loan.