Accounts Receivable - Best Practice Features

Process Features



Formal credit checks
applied to all new
customers within 24
hours using credit
bureau



Monitor credit
status/terms on regular
basis



Customer account
managers provided
with up to date credit
status



Treasury policy set on
late and prompt
payments



Authority levels clearly
defined



Credit policies defined
and agreed



Terms and conditions
agreed with customers



Consolidated periodic
invoicing for high
frequency shipments



Bank remittance
notices issued with
sales invoices to
facilitate
reconciliation



Self billing invoices by
high volume
customers



Consider outsourcing
regular
invoice/payment eg
utilities



Regular review of
invoice queries and
credit notes



Reconciliation of AR
balances to GL
control accounts on a
regular basis



Credit insurance
arrangements
evaluated periodically



Customer account
managers responsible
for sales and cash
collection



Constant monitoring of
debtor days, daily
collection, ageing of
debt



Customer contact
records maintained



Outsource cash
collection where
appropriate



Determine and report
on credit targets



Monitor overdue debts
and take action within
agreed policy

Establish credit

levels

Issue sales

order

Issue invoice

Monitor credit/

collect cash



Sales orders prepared
using pricing
database with pricing
profiles for products
and customers



No order processed
without valid
customer PO
reference



Delivery note acts as
invoice for low-
frequency shippings