Reporting and Operations
Invoices may need to be prepared for a number of reasons. Some organizations sell books or newsletters for a fee. Others require registration for meetings or bill for dues. In any event, all invoices should be reviewed by a person other than the preparer before mailing.
If the organization is on the accrual basis, invoices should be recorded in the general ledger when they are prepared. At this point in time, the debit is to accounts receivable (an outside party owes the organization money) and the credit is to revenue.
When the cash is received, the receivable is reduced and cash is increased on the books.
Copies should be kept of all invoices.
An aging list should be kept. In this manner, the amount of time it takes for an invoice to be paid can be tracked. Further, collection efforts can be started in a timely fashion.
If it is later determined that an amount will not be collected, the invoice and corresponding revenue should be written off. All amounts written off should be approved in writing by management.