A/R Testing-AI Role

Contents

Part of the Due Diligence process might be to perform A/R testing. If the Acquisition Lead determines this testing should be done, AI will assist in obtaining the necessary data or coordinating the testing depending on the type of testing selected. Accounting will follow their processes to compare the seller’s open A/R report to the data returned by the customers. The following steps outline the AI role in the A/R testing process of Due Diligence.

Step

Action

Acquisition Lead requests an A/R test to be performed as part of due diligence

AI contacts the seller to obtain an open A/R report which contains the customer name, customer number, and current open A/R balance

AI saves a copy of the report in the seller’s Accounting folder in the Private folder on the Advantus Acquisition Integration SharePoint page

AI works with the Acquisition Lead and Seller to determine which testing method will be used.

Vendor Portal Only
Advantus Initiated Contact
Third-Party Initiated Contact
Seller Initiated Contact

Note: Refer to Accounts Receivable Testing Options for Acquisitions document attached for full details on the methods.

AI sends a link to the open A/R report to the Accounting contact (usually performed by the Manager or above) and advises which testing method will be used

Accounting follows its process to select a predetermined number of accounts that will go through A/R testing

Accounting sends a list of selected customers to ai@advantus.com

AI contacts the seller to coordinate next steps or obtain data for the selected accounts based on the type of testing selected

Testing Type	Data Requested or Action Needed
Vendor Portal Only	Either portal access of user ID and password, or Grant access to Advantus on the customer portal to the accounting data
Advantus Initiated Contact	A/P contact information for the customer (including email, mailing address and/or fax number)
Third-Party Initiated Contact	A/P contact information for the customer (including email, mailing address and/or fax number) Note: This data is only required if Advantus is coordinating the third party audit instead of the seller coordinating.
Seller Initiated Contact	Accounting provides a letter for the seller to send to the selected customers Seller provides the customer signed confirmation letters

Accounting follows its process to complete the A/R testing based on the type of testing selected

Testing Type	Action
Vendor Portal Only	Accesses portals and confirms customer data matches sellers’ open A/R report
Advantus Initiated Contact	Sends letter requesting open balance amount that is sent to the customer Tracks to confirm acceptable level of responses are received and follows up until level reached Confirms customer data matches sellers’ open A/R report
Third-Party Initiated Contact	Match responses received by Third-Party audit to the sellers’ open A/R report
Seller Initiated Contact	Tracks to confirm acceptable level of responses are received and follows up until level reached Confirms customer data matches sellers’ open A/R report

Accounting sends the results of the A/R testing to ai@advantus.com and includes the Acquisition Lead on the email

Acquisition Lead reviews results of A/R testing. If satisfied with the results, process is complete. If determines additional testing is needed, contacts Accounting to request additional customers to be selected.

Steps 6-11 are repeated until satisfied with A/R testing results.

Accounts-Receivable-Testing-Options-for-Acquisitions Download

Updated on June 24, 2024

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