Definition: The schedule of accounts receivable is a report made by management that lists each customer in the accounts receivable system and how much they owe. In other words, the schedule of accounts receivable is simply a list of all the customers who owe the company money on account.
What Does Schedule of Accounts Receivable Mean?
The schedule of accounts receivable is useful for two main reasons. First and foremost, this schedule allows managers and the accounts receivable department to track and organize the customer accounts that haven’t been paid in full yet. For instance, almost all retailers offer stock credit cards to their customers.
If you applied for and received a Macy’s store card, you could purchase something from a Macy’s department store on account and pay for it in the next 30 days. Unfortunately, many people don’t pay for their purchases within the first 30 days, so Macy’s accounts receivable department makes a list of all outstanding accounts for collections.
Example
As you can imagine, businesses can have hundreds or even thousands of customers with balances on their accounts. This can lead to a big problem with the company actually collecting the money. The schedule of accounts receivable can be used to double-check the outstanding customer balances and generate notices to be mailed to those customers.
The schedule of accounts receivable can also be used to prove out the subsidiary and control accounts receivable accounts at the end of a period. Since sales orders are posted to the subsidiary accounts and the subsidiary accounts are posted to the control accounts, the subsidiary accounts should be double-checked periodically. Management can double-check or prove out the subsidiary accounts before they are posted by comparing them to the schedule of accounts receivable.
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