Accounts Receivable

Accounts receivable is an amount of money owed to an individual, company, organization for the goods / services provided to them. It is a current asset of a company and represents the amount that customers owe to a business. Accounts receivable are payable by the customers within a year from the date of sale of goods / services.

Accounts receivable service is a vast area and includes

• Accounts receivable recognition
• Accounts receivable valuation
• Accounts receivable disposal

These processes can be cumbersome and time consuming therefore large organizations either use accounting software or outsource the process to professional accounting firms. This helps to manage it in a better way.

Organizations realize that not all debts will be collected and recovered, so they make an allowance for bad debts, that are in turn subtracted from the total accounts receivable. Accounting firms collect debts on behalf of their clients through settlement offers, payment plan negotiation and sometimes legal action.

Outsourcing the accounts receivable provides the following advantages

• Ensuring internal control
• Effective expense administration
• Timely reconciliation of accounts receivable
• Saving time and man hours
• Preventing fraudulent invoices