Friendly Systems Consultants
Memo
To: Kim Debe, Vice President of Accounting, Central Manufacturing Inc
From: Ward Systems, Chief Consultant, Friendly Systems Consultants Ltd
CC: Jim Wdeve, Chief Accountant, Central Manufacturing Inc
Date: 1/30/2006
Re: Accounts Receivables Management at Central Manufacturing Inc
Introduction
This report presents some preliminary results of a study currently being conducted by Friendly Systems Consultants Ltd. The study is an analysis of an Accounting Information System currently used by Central Manufacturing Inc. The scope of the study is the customer account management business process. We conducted structured interviews of accounting staff and the management team and reviewed the methods and procedures utilized by the company in order to manage their Accounts Receivable. Our observations are as follows.
Identified Issues/Problems
The president of the company is concerned with the bad debt losses and the fact that a large number of accounts are more than 90 days overdue. Late collections, large number of overdue accounts, and bad debts appear to be the symptoms of inadequate Accounts Receivables Management.
There were several findings of concern with respect to the customer account management procedures currently used by Central Manufacturing Inc. In order to conduct the thorough investigation, the following information is required:
- Is there a defined credit policy?
- Who is responsible for customer billing and collection functions?
- Does company invoice its customers promptly and sends statements regularly?
- Does company use an approved Customer Database?
- What kind of information can be found in the Customer Database?
- Who has the ac ...