220 - Parts & Service Accounts Receivable

Current Assets

Receivables

Synopsis

Account 220

Debits

Credits

  1. The amount of sales of service, parts & accessories, and body shop sold to customers on open account.

  2. C.O.D. shipments of parts & accessories sold to customers.

  3. Customers' checks used to pay on account returned by bank.

  1. Payments received from customers on service, parts & accessories, and body shop on open account.

  2. Cash discounts allowed for prompt payment.

  3. Credit memorandum issued to customers for service, parts & accessories, and body shop adjustments.

  4. Accounts determined to be uncollectible.

 

 

Remarks:

Parts & Service Accounts Receivable represents the total of all unpaid balances in the accounts receivable subsidiary ledger, for all open account sales (including non-automotive, other automotive merchandise, and extended service contract claims) by the Service, Parts and Accessories, and Body Shop Departments.

 

The responsibility of extending credit and collection activities should be delegated to one person only.  New accounts should be added only after a complete credit investigation has been made.

 

Credit, once established, should be continued only as long as the customer maintains a current account balance.  Collection follow-up action should be taken as soon as the account becomes past due.  Collection follow-up information should be recorded  in the DMS system, and on the accounts receivable aged analysis prepared each month-end.

 

For the purpose of aging, the due date of all customer receivables  should be upon receipt of monthly statement, or by the 10th of the following month at the latest.

 

A comprehensive receivable aging analysis is provided at the bottom of Page 1 of the Subaru Dealer Financial Statement.  A diligent, timely, and systematic collection effort of all accounts will lessen bad debt losses.

Note:

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