Sage accounts receivable automation: the claim pack

Sage accounts receivable automation earns its keep the afternoon a customer enters business rescue, because the practitioner wants one thing from you: the claim, reconciled as at the commencement date, with the documents behind it. From Sage that is the customer statement as at the date, the open-invoice list with its delivery notes attached, the credit notes, and the signed terms with the reservation-of-ownership clause. Then a new account for anything supplied after the date, so the next order is never mixed with the old debt. Two hours if the records are in Sage. Two weeks if they are in a driver's cab.

Werksmans' Eric Levenstein, Amy Mackechnie and Clio Patricios set out what the notice does not tell you on 18 September. The banked piece on this article is the three decisions. This is the pack.

Before you start

• The commencement date of the rescue, from the notice. Everything below is "as at" that date.
• The customer's account in Sage, with every invoice, payment and credit note posted up to date. If the last week's invoices are still in a tray, post them first, dated as issued.
• The signed credit application or supply agreement as a PDF, and the delivery notes for every open invoice, wherever they are.
• The banked Friday-list piece assumed the debtor was going to pay. Drop that assumption for this customer and read the pack as a creditor.

Step 1: run the customer statement as at the commencement date

Sage's customer statement, dated to the commencement date, is the spine of the claim. It shows every invoice, every payment and every credit note up to that day and the balance the rescue found you holding. Save it as a PDF with the date in the file name. Werksmans' rule is that the pre-rescue claim is reconciled as at the commencement date, invoices against payments, credit notes, delivery records and any existing disputes.

Step 2: list the open invoices and attach the delivery notes

Run the aged or open-invoice list for the customer as at the same date. For each invoice, attach the signed delivery note to the invoice record in Sage. An invoice with no proof of delivery is an invoice the practitioner may query, and a queried invoice is a smaller claim and a smaller vote.

Step 3: pull every credit note and read the dates

List the credit notes on the account. A credit note dated before commencement reduces the claim and belongs in the pack. A credit note dated after commencement is a decision about post-commencement trading and needs a reason on it before it is passed.

Step 4: find the agreement and the clause

The credit application, signed. Read it for a reservation-of-ownership clause, a suretyship from a director, and the cancellation right. Werksmans' point is that a creditor relying on reservation of ownership or a suretyship may be in a materially different position from an ordinary concurrent creditor. The practitioner's classification of the claim affects both its treatment and your voting interest. The clause does nothing in a drawer.

Step 5: check for disputes on the account

Search the customer's emails and the Sage notes for any invoice they queried. A dispute the practitioner does not know about will be raised at the meeting, and it is better in your pack than in theirs.

Step 6: submit the claim with the pack

The statement, the open-invoice list with delivery notes, the credit notes, the agreement and the surety. Then a covering letter stating the amount claimed as at the date and the basis on which you say it is secured or preferent. Werksmans: claims must be accurately recorded when submitted for proof. The plan, once adopted, binds creditors regardless of whether they attended, voted against it or proved their claims. Silence is not neutral.

Step 7: open the post-commencement account

Create a new customer account in Sage for the same company, suffixed with the commencement date. Every order after the date goes there, on the terms the practitioner has agreed in writing: cash, on delivery, or against milestones. Werksmans lists the questions to settle first: who authorised the supply, whether the practitioner approved it, from what funds it will be paid. The old account is frozen at the statement in Step 1.

Step 8: diarise the two meetings

The first creditors' meeting is within 10 business days of the practitioner's appointment. The plan is due within 25 business days unless extended, and Werksmans notes plans are generally published months later once creditors have consented to an extension. Put both dates in the calendar with the pack attached.

What breaks here

The delivery note in the cab. Step 2 cannot be done from Sage if the signed note is a paper slip in a folder under the seat. Every day it stays there is a day the practitioner's schedule of claims may be finalised without it.

The credit note dated after commencement. Passed in good faith by someone tidying the account, it reduces a pre-commencement claim by a post-commencement decision. Step 3 catches it if the dates are read.

The surety nobody filed. The credit application from 2019 had a director's suretyship on page three. Nobody scanned it. The claim goes in as concurrent.

The moratorium. Section 133 of the Companies Act stops enforcement without the practitioner's consent or the court's leave. It does not extinguish the claim, and the Supreme Court of Appeal has held that cancelling an agreement is not, without more, enforcement. Whether you may cancel depends on your contract. Take advice before Step 7 if the contract is silent.

When this stops being enough

The pack is a set of PDFs assembled from Sage, a Drive folder and a filing cabinet, and its weakest document is whichever one was not in Sage. The delivery note is the usual one. The version that produces the pack in an hour has the delivery record attaching itself to the invoice on the day of delivery. The agreement and its clauses sit on the customer record with the rest. That is what Zorah builds for South African businesses running Sage, so that the statement as at a date carries its own proof.

On Monday, pick your largest customer and try to assemble Steps 1 to 4 for them in an hour. Where the hour runs out is where the claim would be weakest.