The greatest burden falls on the customer accountant in good management of customers’ balances and following up on issued invoices and customary collection dates within the company’s monetary policy. He must also monitor the maturity dates of commercial papers accepted for payment, such as bank checks. This is in addition to making all adjustments for these accounts, preparing daily, weekly, and monthly inventory statements and cooperating with the treasury accountant in monitoring cash flows within the facility. We will learn about all these details in the context of the next few lines.
Customer accountant: job tasks and responsibilities
The job of a customer accountant varies from one company to another, depending on the nature of each establishment, but let us agree on some fixed tasks and responsibilities that do not change except in some specialized establishments, and we mention them as follows:
Review the balances of cash and deferred sales and ensure that the balances match.
As we know, the customer account is a debit account in nature, and the customer account is linked to two basic accounts, which are the revenue account and the sales account, whether forward or cash sales. The customer account is more linked to forward sales since if the sales are in cash, the greatest impact will be on the Treasury account.
Practical example
At Al Amal Car Trading Company, several cars worth 200,000 Saudi riyals were sold. Half of the value was paid in cash, and the rest of the value was postponed to become due thirty days after the date of the invoice. What is the accounting treatment for that?
It is clear to us in this example that if the full value is not paid, the impact will be on three accounts: the treasury account if payment is in cash, the bank account if payment is by check, the customer account, which is the amount remaining due on their account, and the third account is the revenue account or sales revenue account. Therefore, the form of the accounting entry will be as follows:
| the date | account name | debt | Credit |
| 1/1 | Al Amal Company customer account | 100000 | |
| 1/1 | Bank or fund account | 100000 | |
| 1/1 | Sales revenue account | 200000 |
In continuation of what was presented, customer accounts are negatively affected when the customer pays part of the amounts owed to him. Therefore, when the amounts are taken, the customer account is recorded on the credit side for the establishment, and the value of the amount paid is reduced from the total customer account. Therefore, the accounting entry will be as follows:
| the date | account name | debt | Credit |
| 30/1 | Bank or fund account | 100000 | |
| 30/1 | Customer account | 100000 |
Sometimes the goods are damaged either on the way or some units are damaged within the inventory balance. Therefore, an account will be formed in the name of sales returns, which for the facility is a debit account because they are amounts due from the facility to the customer. The accounting entry in cases of returned goods will be as follows:
| the date | account name | debt | Credit |
| 30/1 | Calculating sales returns | 100000 | |
| 30/1 | Al Amal Company customer account | 100000 |
We touch on another item in following up on customer accounts, which are bad debts and doubtful debts. These are amounts owed by the client, which have passed for a long time, and the company has taken all legal measures to claim their rights. Here, international accounting standards intervene, and in the application of the principle of caution, the clients’ accountant must create an account for an allowance for bad debts and an allowance for doubtful debts. The accounting treatment for this allocation is carried out as an expense and is placed on the debit side of the balance sheet at the end of the period or in the periodic statement of financial position if the facility prepares it during a quarterly, semi-annual, or during the year.
Follow up on customers’ balances, prepare a comprehensive report on the customers’ status, and follow up on the payment periods of cash receipts owed by them.
For the customer accountant to follow up on customers’ balances, some important items must be reviewed, which we mention below:
- Cash discount: It is a discount allowed by the company if the customer has paid the amount due in cash. The company gives him an incentive, and in most cases, it does not exceed 1% of the total value of the invoice. Therefore, the cash discount must be taken into account when reviewing the customer’s total invoices, and the amount paid is determined and appears directly in the treasury account.
- Commercial discount: It is a discount that the company gives to the merchant in exchange for price instability within the available price offer, where some fluctuations in prices may occur, and therefore the merchant must be taken care of and given a commercial discount through which he can overcome price fluctuations.
After taking into account all the previous items, you can now prepare the customer report, which will be as follows:
| customer name | Balance | The period is up to 30 days. | 31-60 days | 16-90 days | 91-180 days |
| Client 1 | 20000 | 10000 | 5000 | 5000 | |
| Client 2 | 30000 | 15000 | 10000 | 5000 | |
| Client 3 | 50000 | 20000 | 15000 | 15000 | |
| Client 4 | 85000 | 80000 | 5000 | ||
| Client 5 | 66000 | 60000 | 6000 | ||
| Total | 251000 | 125000 | 35000 | 80000 | 11000 |
This report shows the amounts owed by customers at the end of the fiscal year. Customers have been divided into multiple categories. This report is of great importance to management, and through it, the accounts and a list of cash flows entering the facility are monitored.
Follow up on receipts and collection papers delivered by customers to sales representatives.
This task is considered one of the basics of the customer accountant’s work, as he matches the customers’ balances with the receivable papers delivered to him by the sales representatives, then takes the necessary accounting treatment for all the facility’s commercial papers, and the accounting entries in this regard begin as follows:
First case
When checks are received from sales representatives, the following journal entry is made: Let us assume, for example, that checks amounting to 10,000 Saudi riyals were received with a check that matures after thirty days. The accountant records the following entry:
| Statement | Credit | debt |
| from/receivable papers | 10000 | |
| To/customers | 10000 |
The second case
If the check is received from customers and there are commercial profits deducted from the checking account, the journal entry will be different and will be from three parties, as follows:
| Statement | Credit | debt |
| From/receivable papers | 9900 | |
| Commercial and industrial profits tax | 100 | |
| To/customers | 10000 |
Then the check is collected directly from the bank, and the amount is deposited in the branch’s treasury or a transfer is made between customer accounts to the company’s bank account. The accounting entry for this process is as follows:
| Statement | Credit | debt |
| From the bank | 10000 | |
| Checks under collection | 10000 |
Preparing detailed sales reports in quantities and values and presenting those reports to the company’s financial management
This report is known as a detailed sales report or sales analysis report. The report includes a comprehensive statement of the units sold and the money collected, along with a statement. This report shows the extent to which the sales team has done its job and also explains an evaluation of existing customers and how to attract new customers. The objectives of preparing detailed sales reports are clear through the following points:
- Sales reports are used to determine the company’s long-term goals.
- We can determine purchase orders by tracking the sales volume and measuring the sales volume at competitors’ price levels. If it turns out that competitors’ prices are lower, this means that the purchases within the facility from the factory or the first supplier have some deficiencies.
- Sales reports show the extent of the success of the promotional offer plans presented by the company and whether those offers paid off for the period in which sales were measured or not. It also shows which of these offers were admired by customers and which of them did not receive acceptance and satisfaction from customers. Depending on the division of customers into geographical regions, explains which of these regions needs more marketing and promotional plans than the other region.
- Improving and developing the sales team within the company. Through the sales report, the most productive representatives and the least productive representatives will become clear. Accordingly, the company’s management can conduct training courses on sales and marketing skills.
Detailed sales report form
| product name | Retail price per unit | Total sales (price) |
| keyboard | SAR 20.00 | SAR 32,400.00 |
| Display Screen | SAR 88.00 | SAR 141,650.00 |
| printer | SAR 70.00 | SAR 97,972.00 |
| keyboard | SAR 63.00 | SAR 109,915.00 |
| Display Screen | SAR 35.00 | SAR 70,264.00 |
| printer | SAR 55.00 | SAR 103,950.00 |
| Scanner | SAR 83.00 | SAR 116,769.00 |
| keyboard | SAR 34.00 | SAR 69,870.00 |
| Display Screen | SAR 35.00 | SAR 59,955.00 |
| printer | SAR 41.00 | SAR 90,720.00 |
| lizzie indicator | SAR 27.00 | SAR 49,239.00 |
| Scanner | SAR 38.00 | SAR 78,512.00 |
| keyboard | SAR 92.00 | SAR 204,424.00 |
| Display Screen | SAR 43.00 | SAR 90,976.00 |
Job description for the customer accountant profession within companies
- Communicate directly with customers to determine their appropriate needs, requests, and promotional offers, study the market situation, and present periodic reports in this regard to the company’s senior management.
- Communicate directly with sales supervisors and sales representatives, address deficiencies from an accounting standpoint, present the problems of the sales department to management, and attempt to propose a solution to those problems it faces.
- Negotiating contracts concluded between the company and major customers and between the company and major suppliers so that customers are satisfied with the prices and quality of the products and so that we obtain the largest possible discount at good prices from the suppliers, and also presenting those contracts to senior management.
- The necessity of activating after-sales services and periodic follow-up with the customer, and trying to expand vertically instead of horizontally, by means of the customer trying to convince another customer of the necessity of dealing with the company, and so on.
- A trial balance is prepared for customers, and the various collection methods are followed up with the collection methods that have been developed, such as electronic wallets or transfers via mobile phone applications.
- Preparing a full debt report on a weekly and monthly basis, trying to pay these debts in instalments or rescheduling them, and reaching an appropriate agreement that satisfies all parties and does not turn into bad debts, as this is considered a loss for the company.
- Preparing reports on sales returns and returns, trying to address damage to the goods, and confirming to the warehouse management that no defective units were received from suppliers.
- Preparing a sales report that includes comparisons between periods of the year and explains the differences between the numbers, ups and downs.
- Paying full attention to the documentary cycle for customer accounts and supplier accounts and following up on the collection of receivable notes and payment of notes payable
Conclusion
Here, we have completed a detailed presentation of the tasks and responsibilities of the customer accountant, along with practical and applied examples that illustrate the daily operations and restrictions that are recorded in the documentary cycle related to his work tasks. Then the complete job description of the customer accountant was presented, and we hope that we have succeeded in presenting this.
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