Accounts receivable (AR) process

The AR process

The AR process is the process by which businesses receive payments from customers for goods or services sold.

The process has several steps:

  1. Credit Decisions: the supplier of goods and services checks if the prospective customer is of sufficient credit worthiness to warrant the supply of the products or services under an account arrangement.
  2. Billing and Bill Distribution: happens once the good/services have been supplied.      Payments: are completed by the customer once they are ready to pay.
  3. Receipting, Allocations and Reconciliation: This step is undertaken by an Accounts Receivables Officer. The AR Officer identifies a payment deposited into the supplier bank account,  receipts it into the AR system, allocates it to an invoice and reconciles to ensure that the payment is correct.
  4. Collections: The Collections Officer identifies all invoices that are short paid or unpaid as of the due date.
  5. Disputes Management: if the customer disputes a bill/invoice typically, this step is typically managed between a Collections Officer and the customer.
  6. Bad Debt: once the bill/invoice reaches a set date and/or is under dispute and is not resolvable to the satisfaction of the supplier, it would then be considered a “bad debt”.

While there are products assisting businesses to automate some of the AR steps in the process, IP Payments has developed a unique, award-winning solution that automates the entire AR process:


Check how SIPP (Statement and Invoice, Presentment and Payment) can help your business.

Or you can contact our team of cash flow experts, they will be happy to help you.