Bearing in mind what we expected to find in a sales ledger, we can say typical data input into sales ledger system is as follows.
• Amendments to customer details, ex change of address, change of credit limits etc
• Insertion of new customers
• Deletion of old “not-active” customers
Transaction data relating to:
• Sales transaction, for invoicing
• Customer payments
• Credit notes
• Adjustments (debit or credit items)
Some computerized sales ledgers produce invoices, so that basic sales data is input into the system. But other business might have a specialized invoicing module, so that the sales ledger package is not expected to produce invoices. The invoice details are already available (as output from the specialized module) and are input into the sales ledger system rather than basic sales data.
Process in a Sales Ledger System
The primary action involved in updating the sales ledger is modifying the amount outstanding on the customers account. How the amount is modified depends on what data is being input. When processing starts, the balance on an account is called the brought forward balance. When processing has finished, the balance on the account is called the carried forward balance. These terms are often abbreviated to bring forward and caught forward.
What a computer does is to add or subtract whatever you tell it to from the b/f balance, and end with a caught forward balance. This method of updating customer accounts is called the balance forward method.
Most systems also offer users the open item 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 of individual invoices can be identified and chased up. The customers outstanding balance is the sum of the unpaid open items. The open item method follows best accounting practice, but it is more time consuming than the balance forward method.
Outputs from a Sales Ledger System
Typical outputs in a computerized sales ledger are as follows.
• Day book listing. A list of all transactions posted each day. This provides an audit trail i.e. it is information which the auditors of the business can use when carrying out their work. Batch and control totals will be included in the listing.
• Invoices. (if the package is one which is expected to produce invoices)
• Statements. End of month statements for customers.
• Aged debtors list. Probably produced monthly.
• Sales analysis report. These will analyze sales according to the sales analysis codes on the sales ledger file.
• Debtors reminder letters. Letters can be produced automatically to chase late payers when the due date for payments goes by without payment having been received.
• Customer lists (or perhaps a selective list). The list might be printed on to adhesive labels, for sending out customer letters or making material.
• Response to enquiries. Perhaps output on to a video screen rather than as printed copy, for fast response to customer enquires.
• Output onto disk file for other modules. Example, to the stock control module and the nominal ledger module, if these are also used by the organization and the package is not an integrated one.