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Seven steps to better accounts receivable

Too many companies treat accounts receivable (AR) as an afterthought but in doing so, they overlook opportunities to improve the process. Establishing an excellent order-to-cash process is essential, according to the Accounts Receivable Automation white paper by OpusCapita, a B2B sales and payments service provider. The report acknowledges some of the pain-points of AR reconciliation, which include the complex, cumbersome invoice-to-cash process, which is often manual and slow, and the human task of sorting out exceptions in unmatched invoices. To ease some of these problems, OpusCapita suggests taking the following seven steps:

  1. Enable close collaboration between sales and finance to determine payment terms that suit both your business and your customers.
  2. Adopt clear policies for issuing credit to customers and a culture that ensures that the established policies are also followed in practice.
  3. Digitalise AR-related processes and switch to electronic invoicing to speed up invoice delivery times.
  4. Focus on your invoicing process to improve the quality and accuracy of your invoice information and to make sure your invoices are generated in a timely manner.
  5. Demand more detailed payment information from your bank account statements – XML-based CAMT material supports the AR reconciliation process better than basic MT940 format.
  6. Improve your ability to allocate incoming cash correctly and quickly, to be able to identify outstanding payments and take appropriate action to collect your receivables.
  7. Complete the automation and finalize account statement processing with automated posting utilizing the information gathered in reconciliation.  

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This item appears in the following sections:
Payments - Receipts
Accounts Receivable Management
Working Capital Management
Order-to-Cash Cycle in WCM

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