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Accounting for Debtors

A computerized sales ledger will be expected to keep the sales ledger up-to-date, and also it should be able to produce certain output. The output might be produce daily, monthly, quarterly or periodically. Example- responses to file interrogations, or customer name and address lists printed on adhesive for dispatching circulars or price lists.

What we need to do is to have a closer look at the forms that input, output and processing take within a sales ledger. We will begin by thinking about what data we would expect to see in a sales ledger.

Data held on a sales ledger file

The sales ledger file will consist of individual records for each customer account. Some of the data held on the record will be standing data. Typically items of standing data are:

• Customer account number

• Customer name

• Address

• Credit limit

• Account sales analysis code

• Account type

Each of these items is referred to as a field of information. Other data held on a customer record will change as the sales ledger is updated. Such data is called variable data, and will include:

• Transaction data

• Transaction depreciation

• Transaction code

• Debts

• Credits

• Balance

The file which contains these customer records – the sales ledger – is sometimes called a master file. If it is updated from another file containing various transactions, then that file is called a transaction file. Developments in the way computers store information mean that you not likely to see these items much any more – people more often talk about “databases” of information.

Integrated Software

Each module may be integrated with the others, so that data entered in one module will be passed automatically or by simple operators request through into any other module where the data is of some relevance. For example, if there is an input into the invoicing module authorizing the dispatch of an invoice to a customer, there might be automatic links:

• To the sales ledger, to update the file by posting the invoice to the customers account.

• To the stock module, to update the stock file by:

Introducing the quantity and value of stock in hand

Recording the stock movement

• To the nominal ledger, to update the file by posting the sale to the sales account.

• To the job costing module, to record the sales value of the job on the job cost file.

• To the report generator, to update the sales analysis and sales total which are on file and awaiting inclusion in management reports

Advantages

• It becomes to make just one entry in one of the ledgers which automatically updates the others.

• Users can specify reports, and the software will automatically extract the required data from all the relevant files.

• Both of the above simplify workload of the user, and the irritating need to constantly load unload disks is eliminated.

Disadvantages

• Usually, it requires more computer memory than separate (stand-alone) systems which means there is less space in which to store actual data.

• Because one program is expected to do everything, the user may find that an integrated package has fewer facilities than a set of specialized modules. In effect, and integrated package could be “jack of all trades but master of none”.