Understanding Accounts Receivable process flow

Before we start our discussion of Accounts Receivable processes, let's first understand two most commonly used AR terms: pending items and items. We said earlier that customer invoices are interfaced from the Billing module (although it is not the only source for AR). When these transactions (from various sources) enter the AR system, they are known as pending items . They are still not part of the total customer balance. A batch process known as Receivables Update later posts these pending items to the customer accounts and updates the outstanding balance. Now these transactions are referred to as items. In other words, a transaction that is part of a total customer account balance is an item, while a transaction that is still waiting to be posted to a customer account is a pending item.

Let's consider a simple example to understand this. Assume that the total outstanding balance for a customer is $1000. Now the Billing module sends two more...