Accounts receivable (AR) is a key component of any successful business. It refers to the money owed to you by customers or clients for goods or services they have purchased on credit. An effective accounts receivable process flow is essential for managing cash flow, reducing bad debt and improving customer satisfaction.

The AR process flow begins when an invoice is sent out requesting payment for goods or services. This can be done manually or electronically, depending on your company’s preferences. Once payment is received, it should be processed quickly and accurately. If the payment fails, a series of recovery actions should be taken in order to collect any outstanding debts. Finally, if a debt cannot be collected, it must be reported as a write-off in the accounting system.

By developing solid policies and procedures related to accounts receivable management, businesses can ensure seamless and secure operations and improve their financial performance. With an efficient AR process flow in place, businesses can confidently accept payments from customers knowing there will be an organized approach to handling each transaction.