Accounts Receivable: Account Labels

Last week we discussed Accounts Payable account labels which are a way to assign meaningful names to GL accounts for the purpose of Accounts payable transactions.   There is also account label functionality in Accounts Receivable to support Efficient AR Data Entry, but it is completely separate from the Accounts Payable labels.

Just as in Accounts Payable, the Accounts Receivable account labels can also be used to limit visibility of GL accounts and categorize accounts.  One addition to their functionality in Accounts Receivable though is that they are used for grouping subtotal lines in invoices, such as sales tax.

AR account labels can be turned on by navigating to Accounts Receivable > All > Setup > Configuration as shown below:

Efficient AR Data Entry - AR Config

You will then scroll down to the Enable functionality section and place a check in the checkbox next to Enable account labels.  Please note that account labels can bet turned on an off as required during setup and use of the program with no loss of your label configuration.

Efficient AR Data Entry - Enable Account Labels

After placing the check mark in the box, save your settings.

Account labels are defined by navigating to Accounts Receivable > All > Setup > Account labels as shown below:

Efficient AR Data Entry - Account Labels

Click Add and complete the information relevant to your label and click Save.  In our example we will create a label named ‘Postage’ which will map to the ‘6130 – Office Expenses – Postage & Deliver’ GL Account.

Efficient AR Data Entry - Account Label Info

In order to confirm your settings, create a new AR Invoice and look in the Entries section of the form.  There you should see an Account Label column with a dropdown displaying the account label you just created!  Although this implementation may contain dozens of GL accounts, only those with an Account label assigned will be given as a choice.

Efficient AR Data Entry - Account Label Lister

Perhaps you also wish to have an account label for charges related to Fed Ex Fees that also maps to the 6130 GL account.  To do so you must return to Accounts Receivable > All > Setup > Account labels and create a second account label that also maps to GL Account 6130.

Efficient AR Data Entry - Account Label Info2

Now when you create an entry for an invoice you will be given two account label choices:

Efficient AR Data Entry - Account Label Lister2

It’s important to turn Account Labels off during data import.  If account labels are turned on you will run into issues as the import template uses GL Account numbers but the system will be expecting account labels.  If you choose to use account labels it is recommended they be turned off for import and then turned back on once the import is complete.

Next week we’ll learn about how AR Account labels are also an important part of the tax setup!