Accounts Receivable

What is Accounts Receivable?

Accounts receivable, also known as “AR”, is the difference between the amount you have charged families (and agencies) and what has been received in payment. In other words, it is the amount of money owed to you. If you charge a family 100, and they pay you 75, the amount still owed of 25 would be your accounts receivable for that family.

How does a credit balance affect Accounts Receivable?

When a family (or agency) has paid in advance or overpaid, their ledger card will have credit balance (negative balance). This reduces your accounts receivable. For example, if ten families owed you a total of 1,000 and one family had a credit of 200, your accounts receivable would be 800.

How is Accounts Receivable shown on reports?

Depending on the report, your accounts receivable asset is shown in different ways.

• The “Receivable Journal Summary” shows the change in accounts receivable (how much it has gone up or down).
• Reports under the “Charge/Credit Summary” section show a beginning and ending balance (how much was owed at the start and end of the period).
• Reports like those under the “Account Balance Summary” section show just the balance due as of a specific date.

Important! If you have Agency Accounting, you’ll want to run reports under the “Agency Accounting” section so you can choose to include both Primary (parent) and Agency totals on the same report.

Note: Although the Receivable Journal Summary is under the “Family Accounting” section of reports, it does include all transactions, both private pay and agency related.

Why is my Accounts Receivable (AR) incorrect?

Accounts Receivable (AR) may seem incorrect due to:

• You are looking at a Family Accounting view with a Family Account Filter set to just visible accounts, but AR reports include both visible and hidden accounts.
  Solution: Change your filter setting to see all accounts. If a hidden account owes you money, you may want to Make them Visible until you either collect the amount due or Write it Off.

• You are looking at the Family Account balances, but you also have Agency Accounting.
  Solution: If you have both, be certain to run both Agency and Family A/R reports, or the combined reports available within the Agency Accounting reports. One suggested report is in Reports > Standard Reports > Agency Accounting > Account Balance Summary > All Accounts (Primary & Agency).

• You have Expenses and Ledger, and its reports do not agree with your Family Accounting (and Agency Accounting if you have it) balances.
  Solution: at some point in the past, your Accounts Receivable Beginning Balance wasn’t tied to the actual balance on the books. This may have been intentional or accidental. You may also have posted a balance forward in an account without changing the A/R balance on the beginning balance figures.