General information on accounting systems
You can manage your accounting according to the principle of OP (open positions) or according to that of the management of the auxiliary accounting “of debtors and creditors”.
An SME knows its customers and suppliers, accounts of creditors and debtors still open can be easily identified. One can thus give up immediate handwriting of the writings at the time of the emission or the reception of the invoices. The form is chosen also depends, and for the most part, on the number of supporting documents as well as the size and complexity of the business.
At the same time, it must be remembered that, in accordance with art. 957 CO, books of the kind and extent are required to record the relationship of debt and receivables related to commercial exploitation.
The decision to manage according to the OPs or not is thus equivalent to choosing a principle of proportionality.
Open Positions Accounting Systems
What does it mean, in fact, by accounting for open positions?
The accounting of the PO is a form of bookkeeping in which we write entries relating to the commercial cases of debtors and creditors (invoices received, invoices issued) only when they are paid. This amounts to giving up the management of individual accounts for debtors and creditors, which saves time. The number of entries and the risk of accounting errors are thus reduced.
When managing the accounting according to the PO method, the following operations are essential:
- short-term periodic reconciliation of PO posts the correct classification of the supporting documents must imperatively be given a lot of attention.
To summarize, it can be said that the management of the individual accounts of debtors and creditors is suppressed, which however leads to more laborious work of concordance between the pieces. In addition, a correct statement of payments and payments still opened by debtors or creditors must be managed.
PO accounting is suitable for many low-volume customers/suppliers as is the case in a mail-order company, a retail business, craft workshops, energy suppliers and other businesses. electricity, etc.
Accounts Receivable Accounting Systems / Accounts Payable
A debtor/creditor account is maintained in the ancillary accounts for each debtor / individual creditor. Invoices, credits, returns, rebates, and payments are recorded on these accounts. The report to the general ledger is done through “collective writings”, mostly through software. Only the total turnover is visible in the accounts “debtors” and “creditors”, the counter-entries are recorded automatically in the accounts entered at the time of the registration.
Accounts Receivable Management
Debtor management must be given a lot of attention. Deadlines must be established and printed respectively. Reminders must be written and sent.
In terms of management, care must be taken to consider any discount deductions and to pay creditors in a timely manner to avoid any recalls or even lawsuits.
It is necessary to aim at corresponding management of cash and constant monitoring of liquidity.
We can not get into the software here because, on the one hand. Companies generally use a corresponding program. On the other hand, the needs imposed on the program are too numerous to be dealt with here. For example, it is sufficient to think about the current possibilities of payment by LSV. The exchange of data carriers, the current electronic processing of invoices and their payment. The complete processes for issuing invoices, the paperwork, the release of payments, mobile phone payments, etc.