AR Best Practices is a smart strategic decision.
Accounts receivable (A/R), also known as trade receivables or trade credit, is the amount that customers owe a company for goods and services that have been provided. In most business entities this is typically done by generating an invoice and delivering it to the customer which is to be paid within an established timeframe called credit or payment terms. If your company is like most, much of your cash is tied up because you’ve been lending it to your customers through trade credit, providing free, short-term loans to your buyers.
AR departments nationwide are now being viewed strategically to deliver competitive advantage and greater profitability. Yet most small and mid sized enterprises are NOT following AR best practices, they don’t have the resources and tools they need for their AR staff to transform from a purely admin role, to a credit, collections and cash management role. Using Accounts Receivable Best Practices to enhance your trade credit administration is a smart strategic decision.
What do you expect from your AR department?
- Proper management of credit risk
- High performance with minimal operational expenses
- Optimize cash flow with lockbox services
- Provide up-to-the-minute AR reporting
- Efficiency in collections, reducing DSO and bad debt write-offs
Give your staff the tools they need to succeed. Successful companies are using AR Best Practices to effectively manage their trade credit to increase cash flow and efficiency. Following AR Best Practices are essential to success.