In its simplest definition, accounts receivable is a listing of the money due to an organization from its customers
In our context, however, management of accounts receivable is a somewhat broader concept and bears some exploration.
Accounts receivable management usually begins after the issue of a sales invoice to a customer. The issue of the sales invoice is one of the few things we don’t often do for our clients as most organizations prefer to have direct contact with their customers. That being said, there are situations where it makes sense to have us issue sales invoices and we are happy to include that function in our service offering if applicable and advantageous to the organization. Most often our involvement begins right after the sales invoice has been issued and tracking of its collection begins.
Our goal with accounts receivable management is to keep management apprised of what is outstanding at a given time through periodic reporting, what is overdue and may require follow up or attention and any trends we have noticed in the flow of invoicing and collection which may suggest further management action. We do so with the minimum of involvement from management, providing full reporting for quick review and decision making. If and when a collection issue arises we begin a series of predefined processes, developed based on management’s preferences, to collect on the receivable. Every company and every company’s customers are unique so the processes used need to be fully customized to an organization’s needs based on its customers and how they need to be handled. Often a statement of account, or a series thereof, issued at predetermined intervals and with predefined verbiage, is all that is required to collect on overdue accounts. If further action is required then options will be presented so management can make the best decision in the given circumstance.
The keys to good accounts receivable management are efficient reporting to management and unique, well-designed customer follow-up procedures and communication, enabling us to manage an organization’s accounts receivable exactly as they want it done with the minimum of management involvement.
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