Accounts Receivable generally defined to as the Debtors/Customerof the Company and its management is important for all the business irrespective of its nature and size. We can divide the entire Accounts Receivable management into two broad steps:
The initial step is to establish the Credit policies, Term and Conditions, Cash Discount Policiesetc which defines the terms and conditions for customer payments, interest charge in case of late payment, and describe the cash discount policies in case of early payment. These policies helps to ensure the consident Accounts Receivable practices;
Invoice to customer and its booking;
Track receivable on its due date: After recording of Invoice in system, company need to track the receivable on its due date for settling the transaction.
Yes, Advance received against the sale invoice is part of account receivable management process as it will be reflected as advances.
The most important decision is to select the right invoicing tool by the company. Decision on selection of tool shall be on the basis of business of company.
Yes, the Accounts Receivable management shall also include the Marketplaces reconciliations like Amazon, Myntra, Flipkartetc in case of Ecommerce companies.
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