You saw the accounts receivable process till the point where goods and services were delivered and a receipt taken and uploaded in the system.

Whatever deliveries were accepted by your client, will need to be paid for, based on the terms of the sale. As the payments start rolling in, they have to be accounted for and applied to the specific customer, to the specific invoices they relate to. This is the cash applications process.

Some adjustments may be needed here as well, to accounts for discounts etc. for which entries will have to be passed, as these would be known only at the time of remittance.

After this, collections will chip in. This may involve dunning letters, calling, understanding the aging patterns, management reporting etc.

Credit management also forms an important part of these processes. You may be asked to track and monitor the credit status of each customer and compare the same to the approved levels. Also, changes for these approvals will need to be recorded in the tracking and reporting module (whether in the ERP or a simple Excel tracker). On the high end, you may be asked to research the credit status of the customer in the open market. You will need access to research sites, inputs from rating bodies etc. You will need to assess the market dynamics of the customer.

Customer Account reconciliations and dispute resolution also are an important subset of this function.

An insider information, check for tomorrow’s post – a good AP whitepaper……………………..

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