AR Customer Open Item Analysis
Okay, let’s go to the next report, which is quite important. It is the AR Customer Open Items Analysis.
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Open item analysis is something like an AR Aged Report, AR Invoice Aged Report. This report will be used to calculate how many days an AR Open Invoice has been overdue. It will start calculating from the day overdue to the present day. For example, let me explain using a slide. Let me draw the slide and resume this video. Okay. Let’s look at the slide here. The invoice date is 12th of April 2009.
Let me show that to you. Let me run the report anyway. The open items analysis report is over here. Although, this also can be used for the same purpose, this report, I suggest you to use this because it’s more informative and we have more control. Even this one can be used also, and even this one can be used, but I suggest you to use this.
Okay. Sun. Choose the customer and execute the report. See the problem with this report is that it will start showing the customer masked data details like address, payment terms, and so forth.
Normally, we don’t need all this information, so to suppress this information, come here. You see the summarization level? I’ll show you. We go to help. If you press F1, you’ll get the help. If you enter, six, you’ll get the following data, open item list, totals sheets per clerk, company code and all this information, so I want you to filter by summarization level of 6.
Let’s see what we have. See, those details are gone. It’s starting directly from the customer balance. This is what I want. Okay, let’s look at the balances. The system says customer 50001 has got a balance of 100, which is overdue by 1 to 20 days. 0 means it’s not overdue yet, the invoice is still current, but the system is telling that there is an invoice for $100 which is overdue from 1 to 20 days. These things are called bands, overdue bands. Okay, this is something like range, this range. We’ll see how this $100 is falling in this range, 1–20 days overdue. For that, we need to open our memo report to see the line item details.
Let’s go and open. This is the earlier report that I showed you. Let’s look at the line items. Sun. Let’s look at all items. Okay. All items, you also see the settled invoices. I don’t want to show you that. We just go to open items. Okay, you see this? You are seeing only 100 because even though there’s 200, this minus 100 is offset for 100. These two offset each other, so what is left is only 100. That’s why you’re seeing 100 here and not seeing 200 or 300. Okay. You know the reason.
Let’s look at the first item, which is overdue. Okay. Now the formula to calculate, let me save this first. Let’s save this as AR Open Items Analysis.
The way the system calculate the overdue days is like this. Let’s say the invoice date is 12th of April. See this, see the invoice date for the first line item is 12th of April. The posting date will not be used for due date calculation, so always the document date is used. See the posting date here. This posting date will not be used to calculate the due dates, only the document date is used. Okay, now at least you see the purpose of the document date. Posting date is only used to determine the accounting period to post to.
So just look at this date, 12th of April, I have mentioned here 12th of April, and due date, when this invoice is going to be due? Normally, when we sell some items, we give 30 days grace period for the customer to settle. Within the 30 days, you must settle the invoice, otherwise, it will become overdue. So, normally, that’s how we set the due date. This is what we call payment terms. But, looks like for this invoice, there’s no 30 days grace period. It is due immediately, due on the same day of the invoice date, 12th of April, because that means the customer is required to pay the invoice outstanding amount immediately on the date of sales. So there’s no grace period, that’s why it’s due. We will look at the payment terms and more details on the baseline date and so forth.
Baseline date is also linked to this due date calculation, but I’m not going to explain about baseline date because we have a separate session in advanced training called payment terms here, during which we will study more about these payment terms. It’s under accounts receivable. We have a special section for that payment term. During the payment terms session, we will study more about the details on how the system calculates the due dates using the baseline date and payment terms and so forth.
But for this report purposes, we just look at the due on. This invoice supposed to be paid on 12th of April, and 13th and onwards, it will become overdue, so look at this. Invoice due date is 12th of April. I put 12th of April here. Now, the current date is 16th of April. See here? 16th of April, right? Here, once again, 16th of April.
So the due date is always calculated in relation to the current date, so let’s look at the due date calculation. Current date minus invoice due date, which is this become the overdue dates. 16 minus 12 is four days overdue. 16 minus 12, four days overdue, so this invoice has been overdue by four days.
Let’s go back here, overdue item. Four days will fall in this range, 1 to 20 days. It’ll not fall in 21 to 40 days because it’s only four days, therefore, the $100 is written on this band.
Okay, so now you know how to calculate the overdue days. All these are supposed to be set as a current date. Normally, if you want to see the overdue by a previous day, that means you want to see the overdue by yesterday, you can change this to yesterday’s date, so the current date will become 15th of April and the number of overdue days will become 3. 15 minus 12 will be 3. That’s how you play with the key date. But normally, you set it as a current date.
Okay, let’s look at this. What happens if the sub-user wants to see a different band, let’s say overdue by 1 to 30 days, and 31 days to 60 days, and 60 days to 90 days, how can you change this band? You come here, see this, this 20 days corresponds to these 20 days, these 40 days corresponds to these 40 days, so just change here. Let’s put 30, and this one is 30 to 60 days, and 90 days, and 100, I leave it as it is.
Let’s look at it now. See, 1 to 30 days, 31 to 60 days, 61 to 90 days. This is how it works.
You can play with the numbers here to change the band. Let me see, I put 2 days. This one is 4 days. Okay, let’s see where it falls. See, it’s 4 days overdue, so it’s falling in the 3 to 4 days overdue band. It’s not falling in the 1 to 2 days.
Okay, let’s go to the next topic now.
You may watch the full course on the following YouTube link
https://www.youtube.com/watch?v=Gz2WfDm7q_s&list=PLN17Nn94liux88cwVwqbiRQQo1qK4sOdQ&index=30&pp=iAQB