---
title: "Internal Controls"
canonical: "https://kb.myframeworks.com.au/space/FRAM/28384462/Internal%20Controls"
format: markdown
---
There are a number of control mechanisms within Frameworks that not only identify customers in excess of their credit arrangements but also allow you to direct the workflow rather than concentrating on accounts that are easy, avoiding the more difficult ones.

# Control

| **Control** | **Description** |
| --- | --- |
| **Credit Status** | There are three status conditions that are recorded on the customer file (Active, Suspended and Held). |
| **Aged Trial Balance** | The Debtors Ledger must be constantly up to date in order to establish who owes, how much is owed and, for how long.   
Good management information is called for, typically in the form of a Debtors Ledger analysed by customer, amount and the age of the debt.<br>The analysis of debtors balances by age groups:<br>- Gives management a useful picture of the status of debt collections.
- Is an indication of the probability of credit losses - the further past due an account becomes, the greater the likelihood that it may not be collected in full.
- Is a valuable tool in determining management decisions in relation to provisions for Bad Debt.
- Can prove a yardstick to measure the effectiveness of the Credit Collections.<br>This report allows you to investigate ageing and payment pattern, providing information on a selected range of customers, showing their balance, ageing and credit history.   
It should always show the correct ledger balance.<br>> ℹ️ **Reconcile the Aged Trial Balance**
> ℹ️ 
> ℹ️ The total of the Aged Trial Balance represents the total of all the debtors amounts outstanding. If this total does not equal the Debtors Control account,   
> ℹ️ the Aged Trial Balance does not balance.  
> ℹ️   
> ℹ️ If this situation occurs, some hints on reconciling the Aged Trial Balance include:
> ℹ️ 
> ℹ️ - Was the A/R Interface turned off/on sometime through the month?
> ℹ️ - Was the contra entry for a debtor's adjustment posted to an incorrect G/L account?
> ℹ️ - Was the contra entry for a debtor's adjustment posted to the incorrect period?
> ℹ️ - Was the Debtors Control account, as defined in the company file changed at all through the month? |
| **Credit Notes and Refunds** | It is suggested that the Credit Notes and Refunds Report be printed at least monthly so that the Credit Manager can monitor unusual credit or refund activity.   
The report details the type and reason for the credit or refund. |

# Performance Measurements & Reports

Historically, credit departments had little opportunity to see what was causing problems and find solutions to them. With the wealth of information available through Frameworks, payment collections have become more efficient, the workflow is more fluid and the credit department is much better informed as to the impact of the customer on the company.

By prioritising collection activities with the aim of achieving the collection results that you want, customers are segmented in terms of size, risk and other criteria. These criteria become the reporting tools that give management an overview of what is happening; whether present controls are achieving results and can be a basis for taking action if areas of the company’s credit policy are not meeting the needs of the customers:

| **Report** | **Description** |
| --- | --- |
| **Settlement Discount Highlight** | This report enables you to report on the difference between the settlement discount allowed and the actual discount that was taken when payment was made, that is, the actual settlement discount taken.  
By monitoring this figure, management can monitor the effectiveness of offering settlement discounting as a form of marketing and as a collection tool. |
| **New Account Checklist** | This report lists all new customer accounts that have been created between a specified date range, allowing management to monitor any increase in customer base.  
The information included on the report include:<br>- The branch number
- The customer number and name
- The credit limit for the account
- The sales rep’s name and number
- The date that the account was opened
- A subtotal of the total number of new customers created in the time period for the branch |
| **Bad Debts** | This report lists the customers who have been flagged as Bad Debts and lists the customer's account number and name, the date and amount of the last payment and the total outstanding.  
  
If there has been significant movement in this report, the reasons why need to be looked at. For example, has the number of bad debts increased? Are there any payments being recovered? |
| **Receipts for Stopped Accounts** | This report lists all monies that have been received by customers that have exceeded their trading terms and have had their credit stopped.  
  
The report lists the customer number, name and branch, the date that the money was receipted, the amount that was paid and the location of the till that processed the payment,   
the credit status of the customer and the customer group. |
| **Outstanding Deposits** | This report lists customers who have outstanding deposits on their accounts.   
Detail included in the report includes:<br>- Customer details
- The order number and date
- The value of the order and any amount that has been invoiced
- The amount of the deposit that has been applied and the amount that has not been applied<br>This report also lists any pre-paid delivery deposits that have been processed through POS. |