Customer accounting

Accounts receivable encompasses all transactions related to customers: issuing invoices and credit memos, recording payments, reconciling accounts, and tracking late payments and bad debts.

Example

Each month, the accounts receivable clerk enters invoices, records payments received, and forwards the list of past-due invoices to the collections department.

Why It’s Important

This is the debt collection database: if it’s inaccurate or out of date, so are the collection notices and metrics.

For more information: the Order-to-Cash Guide and the basics of accounts receivable management.

See also: account classification, accounts receivable, accounting credit.