New to Accounts Receivable? What You Need to Know

Money is at the center of every business. Nearly every business decision includes services or

goods provided in exchange for payment. The way that businesses collect that money varies

depending on the organization, however the most proficient companies handle their financial

transactions via an effective accounts receivable process.

Paying for Services

In its most basic sense, a “receivable” is a sale that has been made with a good or service

delivered, but the payment for that good or service has yet to be collected. This means that

companies with an accounts receivable department operate with lines of credit extended to some

(or all) of their customers. When properly managed, accounts receivable builds trust and loyalty

with valued clients. Streamlining accounts receivable processing is an easy and helpful way to

ensure business transactions are completed effectively and efficiently.

AR Responsibilities

As an accounts receivable employee, it's your job to ensure that money is collected

from customers for the goods or services rendered by your company. In order to ensure money is

collected in a timely manner, accounts receivable employees are often in charge of preparing

bills or invoices to serve as official documents of transactions and reminders to pay. They are

also charged with keeping a record of who owes money, the amount that is owed, the due date

for the payment, and any other helpful information about the transaction. Innovative business

automation solutions can help to make the management of AR documentation a seamless

process.

Organization Is Key

Accounts receivable employees must also ensure that bills get paid by communicating directly

with customers, either via phone calls, e-mail, or regular mail. In addition to simply collecting

money, the accounts receivable department must also keep fastidious records of financial

transactions in order to properly track all money coming in and out of the company. To assist

with this, accounts receivable employees often keep a ledger to make sure all payments have

been collected and posted. In addition, they are also often required to generate financial reports

about money that is owed and money that has been paid in order to keep other company

employees up to date about its financial situation.

Business Efficiency

Accounts receivable employees are an essential part of any company’s financial inner workings.

After all, the faster invoices are paid and money is collected, the faster a business can do more

business, produce more goods, and offer more services.

One great way for an employee to help increase productivity within their department is to

streamline the collection process. Accounts receivable employees can rely on software like

Square 9’s SmartSearch Document Management to seamlessly integrate with a company’s

internal accounting software, including QuickBooks®. This in return, allows employees to

generate invoices, record invoices transactions, set up automated reminders, and note when a

payment is collected to improve document tracking and organization. By combining

the attentiveness of accounts receivable employees with the helpfulness of effective

software, any company can keep its financial transactions flowing smoothly and seamlessly, to

be more productive, industrious, and fruitful.