Our last post on the workflow for a Cash Applications process was viewed by a whole lot of readers, I presume, people really found it valuable. Here is the link for the same.
https://faoblog.com/processes-ar-cash-applications-workflow/
While I was writing on Cash Applications, I received multiple requests from various readers, who wanted to have a high level overview of accounts receivable processes. Though I had given an overview in the first post in this series, I will cover this in a little more detail.
https://faoblog.com/processes-ar-list-recap/
The accounts receivable processes are a function of the sales side of a business entity. This applies to both manufacturing / trading and service organizations as well. Any business entity will always have two ends to its working, one the receipt of goods / services on which they would work to add their value by converting these into products and services demanded by various consumers / clients / customers. This is basic to the fundamentals of business and economy. On the customer / client side, as the products / services get ready for delivery to the customer / client, a sale of these will emanate. As a process it could be as simple as a direct sale to a customer or may comprise of a number of pieces, which form the width of the accounts receivable function.
As the organizations grow larger, each function starts becoming an authority in itself.
I will continue this in the next post.
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When you feel it is appropriate, I would like to hear how other companies handle the AR “dispute” process. Does each collections agent handle their own, or is there a central dispute desk that takes care of these?
Thanks,
Jeff
Well Jeff, different companies handle it differently. A lot depends upon the types of products / services they provide. Where the products are consumer durables, a centralized desk would be the best option. Where the customers are large, a centralized option may be a start point, however, these customers may need special attention. In such a situation, where relationships matter, each agent should handle their pieces / customers.
Hope that helps.