RECONCILING AND REPORTING RECEIVABLES - 8294-OCT-2020
Accounts Receivables (ARs) should be recorded in a manner that allows for aging analysis. The account balances of all receivables should be classified by the amounts due or past due by varying lengths of time that will allow agencies/departments to monitor and manage receivables. All agencies/departments are required to complete accounting, aging analysis, and reconciliation of receivables outstanding at the end of the month.
Agencies/departments should manage their receivables by following the guidelines below:
- Reconcile detailed accounts receivable subsidiary amounts with the general ledger control totals.
- Reconcile cash receipt postings to accounts receivable subsidiary records.
- Review and reconcile the employee ARs recorded in the agency’s/department’s books to the State Controller’s Office (SCO) record.
- Review and reconcile ARs maintained in departmental records (e.g., program records, payroll records, etc.) with the accounting records.
- Prepare AR reconciliations monthly within 30 days of the preceding month.
- Review AR reports monthly to ensure there is ongoing collection activity.
- Ensure proper recordkeeping by documenting all efforts made toward the collection of receivables. Documentation should include the dates and types of collection efforts (e.g., letters, offset, phone calls, e-mails).
- AR source documents (e.g., Invoices), documentation of collection effort, and documentation of payments and any adjustments should be retained for at least four years after the receivable has been paid.
Government Code section 16583.2 requires an agency/department to submit an Accounts Receivable Workbook to the SCO detailing its accounts receivables. The detailed instructions and forms for preparing the AR Workbook are posted on the SCO website under the Accounts Receivable Reporting section.