Most business owners are well aware of what accounts receivable means but. Whether you’re just learning the ropes or need a refresh, check out these three must-know accounts receivable facts.
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1. What does accounts receivable mean?
Payments that are still processing or unpaid orders are typically filed under the category of accounts receivable. This simply means that the money is coming to you, you just haven’t received it yet.
For example, a paycheck is considered an account receivable to an employee, because you have already worked the hours to earn the money, you just haven’t yet received your payment.
2. Why is accounts receivable important?
These types of accounts matter to businesses both big and small because they indicate that your business is still growing and customers are still interested in the products or services you offer.
3. How do businesses ensure payments are collected?
The best way to ensure that you are able to receive a payment for the goods or services that you offer is by establishing the terms of the credit before an account receivable is set up. This will also make sure that both you and the client or customer are on the same page when it comes to the terms of repayment. These terms will need to be calculated based on your inventory, sales rate, and other internal statistics.
You could also look at offering your customers a small reward for paying for their orders on time or early. If a client is late on a payment, you may have to start adding on late payment fees and perhaps even pass it on to collections.
Manage your accounts receivable with Pipefy
Pipefy is a process automation and management software that simplifies and streamlines the ways teams track the status of each invoice.
With Pipefy, you can create an error-proof collections process built to automate even your most manually run and repetitive tasks. Pipefy frees up your teams to focus on identifying and resolving process constraints or bottlenecks, gain visibility and control over the collections process, reduce errors or delays, and maintain healthy cash flow for your business.