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:
- 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.
- Billing and Bill Distribution: happens once the good/services have been supplied. Payments: are completed by the customer once they are ready to pay.
- 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.
- Collections: The Collections Officer identifies all invoices that are short paid or unpaid as of the due date.
- Disputes Management: if the customer disputes a bill/invoice typically, this step is typically managed between a Collections Officer and the customer.
- 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.