Accounts Receivable Process – Controls Documentation Questionnaire

Instructions: Please utilize the below questionnaire to document your department’s processes and controls related to managing Accounts Receivable. Once all of the questions have been answered, the responses should be documented in a process/controls narrative, for which a template has been provided. For each section, there is a highlighted area in the template narrative where the section responses below should be copied.

Section 1: Customer acceptance and maintenance policies/procedures

  1. Describe the department’s credit policies:
  1. Explain the process completed to accept and extend credit to a new customer:
  1. Describe your process or control to ensure existing customers are still creditworthy?

Section 2: Invoicing

  1. Describe how invoices are properly routed for review and approval (i.e. who performs each step within the process and who performs the review):
  1. What system is used to generate your invoices:
  1. Who has access to the system and who monitors access for the department?
  1. Who initiates the invoices?
  1. Do you have an approval process?
  1. Where is the evidence of review documented?
  1. If the systemused for AR is not KFS, how do you ensure that the data posted to KFS is accurate?
  1. Who performs the reconciliation and how often is the reconciliation performed?
  1. Where is the evidence of review documented?
  1. What steps do you take to ensure proper separations when there is a change in personnel or limited staffing:
  1. Who performs the annual review of roles?
  1. Where is the evidence of review documented?
  1. Describe how the department ensure all activity/sales are properly invoiced and recorded as revenue (i.e. how do you validate that the revenue recorded is complete and all services or sales are invoiced):

Section 3: Application of payments

  1. Please describe your process when a payment is received by your department:
  1. How is the payment processed?
  1. What steps do you take to ensure future payments are sent directly to the cashier’s office?
  1. How does the department handle discrepancies between the invoice and payment amounts?

Section 4: Account reconciliations(there is sample documentation for this section in the process-control document)

  1. Describe the department’s account reconciliation process, including any thresholds used to complete the task:
  1. Who performs the reconciliation?
  1. How often is it performed?
  1. Who reviews the reconciliation?
  1. Where is the evidence of review documented?

Section 5: AR aging analysis, allowance for doubtful accounts and write-offs (there is sample documentation for this section in the process-control document)

  1. Describe the process the department uses to analyze the AR aging report:
  1. For evaluating collectability, the department reviews balances that are ______days past the invoice date. Explain why the department uses this # of days for review.
  1. Who performs the AR review?
  1. When balances are deemed uncollectible, what does the department do? Is the customer sent to collections and in conjunction, the customer balance is written off?
  2. Please describe the accounts and object codes used by the department to post the entry to the general ledger.
  1. Who reviews and approves the AR write-offs?
  2. Where is the evidence of review documented?
  1. For departments that utilize Banner and KFS for AR accounting, at fiscal close, the A&FR accounting team prepares and records a general allowance for doubtful accounts. If your department is not a KFS or Banner user, please describe the process utilized by the department to identify and record allowances for doubtful accounts at fiscal close:
  1. Are customer accounts specifically identified as uncollectible and reserved for?
  2. Is a general reserve methodology used to calculate the allowance (i.e. allowance %’s applied to aging “buckets”)? If so, please describe that methodology and the last time it was validated to ensure accuracy.
  3. Please describe the accounts and object codes used by the department to post the allowance entry to the general ledger.

Section 6: Credit Memos

  1. Describe the credit memo process:
  1. When do you issue a credit memo?
  1. Who can issue a credit memo?
  1. Who approves the credit memo?
  1. Where is the evidence of review documented?
  1. Please describe the accounts and object codes used by the department to post the entry to the general ledger.

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