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Accounting Best Practices, Fifth Edition by Steven M. Bragg Englewood, Colorado

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7–14. Maintain Customer Orders Database

The previous section noted the need for compiling a listing of customer assets that can be used to apply leverage to customers to collect on overdue accounts. The same approach applies to customer orders. If a customer has a large open order with a company, it is likely that the customer will be quite responsive to pressure to pay for open invoices when those orders are put on hold. Consequently, an excellent best practice to implement is to give the collections staff current knowledge of all open orders.

Implementation of this practice is an easy one for most companies; just give password access to the existing customer orders database to the collections staff. This access can be read-only, so there is no danger of a staff person inadvertently changing key information in a customer order. An additional issue is that someone must be responsible for flagging customers as “do not ship” in the customer orders database. This is a necessary step since orders will inadvertently pass through the system if there is not a solid block in the computer on shipments to a delinquent customer. However, many companies are uncomfortable with allowing the collections staff to have free access to altering the shipment status of customers, since they may use it so much that customers become irritated. Consequently, it may be better to allow this access only to a supervisor, such as an assistant controller, who can review a proposed order-hold request with the ...

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