MANAGE BY EXCEPTION

It is Tuesday morning and the controller receives a credit memo from the factory with credits for eighty five rebates. The controller gives the statement to Jennifer, the receivable person, and tells her to book it. As is Jennifer’s routine she prints the factory receivable schedule and checks each rebate received against what is shown on the schedule before posting the memo. If there is a variance of what is being paid and what is shown on the books, she stops, pulls the deal and chases down the variance. It might take Jennifer a few hours to complete the assignment depending on how many variances there are and what other priorities there are on her desk.

By Exception

The by exception method is to post each rebate from the credit memo “as is” without attempting to match or reconcile each rebate paid to what is on the schedule. Immediately after the credit memo is posted, the factory receivable schedule is reviewed and any variances that pop out can be reconciled. If there are only two variances on the schedule after the credit memo is posted then Jennifer only needs to look at two rather than eighty five individual rebates. This method speeds up processing and gets the info on the books faster. The exception method is also recommended for credit memos and payments that need to be spread to individual customer or control numbers such as holdback payments, prep reimbursement, finance reserve payments, etc.