Accounts Receivable is responsible for managing the customer credit outstanding between billing and collection. In the simplest of all worlds, the customer would pay their invoices on time and in full subject to the terms and conditions of the sale. Even in this utopian paradise, companies would have a need to track open balances and project cash receipts / cash flow as part of diligent financial management. In the actual world where we all do business, it is even more important to keep a close eye on open receivables. But that’s just the most basic function of Accounts Receivable. A full-function Accounts Receivable application like the one found in the Acumatica Financial Management Suite will far exceed basic bookkeeping with additional functions that help you track and manage this important asset in your business.
The definition of Accounts Receivable today, in terms of application functions and capabilities, increasingly emphasizes visibility and automation. The basic function of Accounts Receivable is not rocket science – issue the invoice and log the payment information. But a well-designed application can make these tasks faster, more efficient, and more accurate, particularly through the interfaces with other applications that reduce manual entry while ensuring that the entire accounting system is always in sync.
The primary task for the Accounts Receivable application, in addition to receivables data entry and management, is simple visibility. Your accounting staff will certainly require accurate and up-to-date tracking of open balances by customer/account and revenue projections. But a modern Accounts Receivable application can do much more. A comprehensive database combined with dynamic and capable reporting and analysis tools provide the ability to search, sort, and analyze that open account information to better understand your customers and their cash management habits and behaviors. With these tools, you should be able to identify potential problems early, watch them closely, and initiate communications to increase the probability of timely collection. Similarly, keeping close tabs on late receivables, and support for collection efforts, are other important benefits of data management and reporting software that are part of a modern accounts receivable package.
In addition to visibility, the Accounts Receivable application can help in capturing, managing and sharing information with connected applications – order management, CRM, accounting – by simplifying processes, ensuring consistency and compliance, automatically enforcing policies, and enabling new technologies. These features contribute to an Accounts Receivable application that speeds and simplifies processes, directly interfaces to the rest of the financial and customer management applications for real-time, accurate data exchange, and provides the tools to really use receivables information to effectively manage the process and improve cash flow.