What Is the Accounts Receivable Process?
Rayvat Accounting is an outsourcing accounts receivable firm that can help companies by easing accounts receivable management. Partnering with the firm can provide companies with access to manpower and resources which will help in the collection of outstanding payments.
The firm offers virtual bookkeeping services, cash flow management, and payable services, as well as access to online accounting reports. It also sends out weekly reports of their follow-up with customers of partner companies including analysis and metrics on the outstanding debt.
What is Accounts Receivable Management?
The efficient management of cash flow is crucial to a business of any size. An essential activity in the process is accounts receivable management. Accounts receivable services are the money owed to the company by customers for the sales of goods or services that are done to them. These are a company’s income and help them take care of its expenses, thus making their management is necessary.
While the overall act of accounts receivable services might seem simple, it can become complex, involving invoicing and also extending credit to customers. Given the volume of business, the number of clients, and the terms of the agreement, a system to manage outstanding sums of money can be necessary.
Outsourcing Accounting Firm keeps track of invoices and their processing times, reduces collection times, and increases timely payment rates, among other tasks that help optimize the process.
Key Benefits of Accounts Receivable
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Accounts receivable is an asset account on the balance sheet that represents money due to a company in the short term.
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Accounts receivables are created when a company lets a buyer purchase their goods or services on credit.
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Accounts payable is similar to accounts receivable, but instead of money to be received, it’s money owed.
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The strength of a company’s AR can be analyzed with the accounts receivable turnover ratio or days sales outstanding.
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A turnover ratio analysis can be completed to expect when the AR will be received.
Difference Between Accounts Receivables vs. Accounts Payable
When a company owes debts to its suppliers or other parties, these are accounts payable. Accounts payable are the opposite of accounts receivable. To illustrate, imagine Company A cleaning Company B's carpets and sending a bill for the services. Company B owes them money, so it records the invoice in its accounts payable column. Company A is waiting to receive the money, so it records the bill in its accounts receivable column.
Benefits of Accounts Receivable Services by Rayvat Accounting:
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Better cash flow management for the business
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Reduction in Bad Debts
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Owners can focus on their business
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Increase receivable management efficiency
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Reduce administrative costs
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Minimize credit risk
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Decreased overhead costs
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Saved time
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Reduced human error
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