What are receivables?

One of the foundations of the company's operation is the means to keep up with the money owed by clients and to maintain an accurate record of money received from clients to be applied to the amounts they currently owe. The money owed is known as receivables. Most companies have a department dedicated to this area and are responsible for creating and sending accounts, receiving and processing payments and tracking both money and what is still due. The department of receivables contributes to accuracy partly by charging customers for services or goods provided. Usually it is a separation that keeps step with billing information and adapted billing needs of the client.

For example, a large customer can get a percentage discount on monthly goods or IT services purchases based on the volume of business carried out with the company. Employees of receivables would retain this information about the discount within the billing profile of this customer and ensured that all invoices for the clientreflect the right discount. This department often has large inputs about the appearance of the invoice, what information is included and how information is organized.

Along with the creation and distribution of invoices to customers, this department is often responsible for accepting payments on these invoices and ensuring the correct use of money. While some departments tend to publish the payment to the customer and apply it to the oldest excellent invoice, it is more common that the payment will be used for a specific invoice, although this is not the oldest invoice for this client. This allows employees to identify aging on older invoices and work with the client to solve any problems that can prevent the payment of invoices that are older than standard payment terms.

account receivables also closely cooperate with accounts payable arm of the accounting process. Just as it is expected that clients will pay for PSettled goods and services, so the company is expected to pay for outstanding invoices in time. It is important that information on the amount of applicable income is before payment. With the data available, the payable accounts are able to plan and make payments on behalf of the company.