Sales ledger system

Taking into account what we would expect to find in a sales ledger, we can say that the typical data entry in the sales ledger system is as follows.

amendments

• Changes in customer data, for example, change of address, change of credit limits, etc.

• Insertion of new clients

• Elimination of old “non-active” clients

Transaction data related to:

• Sales transaction, for billing

• Customer payments

• Credit notes

• Adjustments (debit or credit items)

Some computerized sales books produce invoices, so basic sales data is entered into the system. But other companies may have a specialized invoicing module, so the sales ledger package is not expected to generate invoices. The invoice details are already available (as a result of the specialized module) and are entered into the sales accounting system instead of the basic sales data.

Process in a sales ledger system

The primary action involved in updating the sales ledger is changing the outstanding amount on the customer’s account. The way the quantity is modified depends on what data is being entered. When processing begins, the balance in an account is called the advanced balance. When processing is complete, the account balance is called the carryover balance. These terms are often abbreviated to forward and forward.

What a computer does is add or subtract what you indicate from the b/f balance, and end up with an advanced balance. This method of updating customer accounts is called the balance forwarding method.

Most systems also offer users the open element method of processing the data, which is much neater. Under this method, the user identifies specific invoices and credits individual payments against specific invoices. Late payments for individual invoices can be identified and pursued. The outstanding balance of customers is the sum of the open items pending payment. The open item method follows best accounting practices, but is more time consuming than the carry forward method.

Outputs from a sales ledger system

Typical results in a computerized sales ledger are as follows.

• List of daily books. A list of all transactions recorded each day. This provides an audit trail, that is, it is information that the company’s auditors can use when carrying out their work. Lot and control totals will be included in the listing.

• Bills. (if the package is one that is expected to produce invoices)

• Statements. End of month statements for clients.

• List of defaulters by seniority. Probably produced monthly.

• Sales analysis report. They will analyze sales according to the sales analysis codes in the sales ledger file.

• Reminder letters from debtors. Letters can be produced automatically to pursue defaulters when the payment due date passes without payment having been received.

• Client lists (or perhaps a selective list). The list can be printed on sticky labels, to send letters to clients or to make material.

• Response to queries. Perhaps output to a video screen instead of a hard copy, for quick response to customer inquiries.

• Output to disk file for other modules. Example, to the stock control module and the nominal general ledger module, if these are also used by the organization and the package is not integrated.