Apr 27, 2022 Author: Accounts Junction
Amid the Covid pandemic, the management of cash flows is a big concern of businesses irrespective of its size and nature. Businesses continuously lookout for ways for quick conversion of accounts receivable in the balance sheet to cash. Thus, efficient receivables management system is essential from an accounting point of view.
What do you mean by accounts receivable?
Accounts receivable are the outstanding payments shown in the balance sheet, that are yet to be received. When a company extends credit facilities to its customer, account receivables represents the value of goods and service it has sold and the right to receive the amount after a specific period.
What do you mean by the receivable management system?
The Receivables management system helps in incorporating all that ensures customers pay for their invoices. An efficient receivables management system enables payments on time and avoids non-payment. It helps to strengthen the financial or liquidity position of the company.
Importance of accounts receivable system in accounting.
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Standardized and smooth A/R process:
An accounts receivable management system streamlines the baselines of the collection from each client. It follows standardized collection policies that accelerate the cash inflows in the business. It includes:
- Accounts updates and management.
- Follow-up processes.
- Payment cycle and types.
- Grace periods and extensions.
When you follow a clear step-by-step process, it reduces the confusion and improvises the process.
2. Accurate and Reliable Data:
As the company grows and expands, it becomes important to keep a check on the A/R processes. Data management is important for A/R handling. Automating the invoicing, and account notification trigger not only saves laborious hours of manual inputting but also, provides more accurate and reliable data. It also tracks the client payments and improves client relationships on hassle freeway.
3. Easy Accessible:
It places a unified system that helps in easy access to account information, emails, and invoices. It makes communication seamless for future review and analysis. It saves time and serves customers through improved communication tools.
4. Shortens the payment cycle:
Businesses rely on accounting systems to get their payments cleared. Then accounts receivable software takes over and automates the sales order and invoice. It also sends the invoice on the same day to the customer and online payment facilities it makes shorten the payment cycle.
5. Reduces administrative cost: An efficient receivables management help to control the administrative costs. Implementation of A/R management business application automates most of the activity & requires less human intervention. Thus it saves your cost and time as well.
6. Enhances customer experiences: Ease and convenience of payments make the customer payment fast as you deliver the product or services. A long and complex payment and credit policy harm your business in the collection process. Accurate and impromptu billing helps to stay on top of your accounting and establish yourself as a reliable partner.
Finding the right account receivables management system with help of Accounts Junction.
Receivables management is a small part of the financial and accounting of your business. At Accounts Junction, we provide complete accounting and bookkeeping services. We are leading outsourcing service providers for receivables management systems in India.
To know more, book a no-obligation appointment with us.
