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AR payments apply to the incorrect invoices

We have a big problem and hope someone on this forum can help. Our AR manager just left our company a few weeks ago. We just ran our AR Aging last week and found one of the accounts has a big amount past due, so we decided to collect the debts. When calling the customer and ask if they could pay one of the invoices, their respond was, we already paid that invoice, even showing us prove that invoice was paid per check #. It was embarrassing so we decided to do some research and found that our AR manager was apply that check # to a different invoice. We then decided to go back further, and found that she has been apply recent payments to the oldest invoices for years. This account is a big account, and I'm talking about million of dollars per month, where the customer ACH a payment, paying for multiple invoices. So now there is no way for us to reconcile which of the invoices hasn't been paid. Have this ever happened to anyone on here, and how did your company going about reconcile the differences. Please help us. P.S. This is a long time customer going back for years. Also, normally when the customer ACH a payment, they also e-mail us the remittances, stating the payment is for these invoices etc... etc...however, she has been deleting her e-mails, so we have no way of tracking it down. We want like to call the customer, but don't know what we should ask. We know the customer is using Oracle Accounting Software. Thanks!

Answers

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Anon
It sounds like you need to consult/notify:
-your CFO and CEO, internal audit...
-attorneys (is a criminal charge possible?)
and figure out how to let your customer executives know.

Make copies of all records that could be significant.Prepare reconciliations of invoices issued and payments received and applied.

Make sure email servers are backed up and old backups are not overwritten.
You need a forensic audit/investigation probably.

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

This seems pretty straight forward. You can either rely on your records or with the help of your customer.

1.Print out all your invoices to the company.
2. Print out all your from the company....all types (You can ask your customer for their payments to you list and make sure you captured/recorded everything)
3. Make a spreadsheet.....
4. REMATCH IT MANUALLY. DO NOT RELY ON WHAT WAS ALREADY MATCHED/RECORDED.

If your customer orders 2x in a month (assumption)...that is only 24 .... multiply it by the number of years....that is not going to be a huge number.

What ever is the leftover amount and if no other errors occurred, the amount will be the same between what you have now and the results of your REmatching.

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