Understanding More About Accounts Receivables Management
In major, Account Receivables Management analyse the denail claims and partial payments in healthcare
March 13, 2014 (Newswire.com) - According to several research results, receivables tend to constitute about 2/5th to about 1/3rd of the entire balance sheet. But, most organizations are still not able to manage the process in an effective manner. Risk management, more often is not proportionate to importance, although it does significantly affect bottom line of every business, irrespective of the domain, segment and other factors.
The importance of the AR process is because they do affect the organization's cash flow. Furthermore, it is stated that it could be a bottleneck for ledger and bookkeeping process. Hence, it is quite predictable that the business continuously monitors.
Multiple steps in the Accounts Receivables Management process
1. Bad debt
2. Dispute management
4. Reconciliations, allocations, receipting
5. Bill and billing distribution
6. Credit decisions
This particular step does include checking if the potential client has or does not have sufficient credit worthiness to avail the services or products under account management.
Reconciliations, allocations, receipting:
An Accounts Receivable officer is said to handle this step. A payment, which is deposited in the supplier's bank account, is identified. Then, it gets receipt into the system. Next, the payment is allocated to the appropriate invoice. Reconciliation is done to ensure correct payment.
Bill and billing distribution:
It takes place just after the goods or services are rendered. As the invoice gets generated, the client makes the payment.
Every invoice, which is short paid or unpaid are indentified at any specific date by collections officer. It could also include sending of reminders to the clients and to receive payments, according to the business policy.
Debt, if any is taken into account for a specific period. In case, it reaches beyond the stipulated debt or is disputed upon, with mutual resolution not agreed to, then it is placed in the bad debt segment.
This step typically is managed by the customer and the collections officer, in case, there is a dispute of the bill or invoice. But, several business establishments and in more particular, the big B2C models tend to have dedicated and professional dispute handling teams.