Narrative of Existing System

Topics: Accounts receivable, Money, Renting Pages: 2 (605 words) Published: March 17, 2013
Narrative (Existing)
The existing A/R system of Bangalow PTY. LTD. CO. is still considered manually done despite the fact that they use computers. It has two sub-companies namely: Marand Properties (rent to own townhouses) and Marand Nest Dormitory (student accommodation for males and females). Before any engagement, the administration clerk accepts inquiries from prospective tenants about the units available. Once a prospective tenant agrees to engage, he is required to pay a reservation fee to the accounts clerk, which is immediately recorded manually using Microsoft office excel. Upon entry, the tenant will fill up a contract that contains the following: general information about the tenant; definitions that specify commencement date, expiry date and unit details; license for use; rental bond; lessee’s obligations; lessee’s terms of payment, costs and occupation rights; default and termination terms; general rules; and the landlord’s obligations. The tenant’s information based from the contract is then entered in the tenant’s list file. Tenants are charged based on the unit types with different rates. The company is collecting payments every start of the month. As initial payment they accept one month advance and one month deposit as to rent and a bond is collected as a security deposit. MN:The chosen room will then be marked occupied by the admin clerk and entered in an excel file where payments are simply entered opposite tenants’ names. A separate excel file is kept by the accounts clerk where tenants are separated according to whether they are “active”, the “moved out” or “did not continue tenancy”. For reporting purposes, on the other hand, the accountant also keeps different excel file with the complete list of tenants and their payments with supporting computations considering the differences in rates and terms.

Accounts receivables are only reflected whenever a tenant defaults payment upon due date- thus updating the accounts receivable accounts...
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