The procedure for account receivables includes extending credit, setting the terms and conditions of sale, and maintaining both the invoices and payments. Statements are also part of the account receivables procedure.Continue Reading
Extending credit is the first part of account receivables, and each new customer must receive an account application and a copy of the terms and conditions of the account. Once the approval is in place, the customer receives an account number in most cases to help the company keep track of invoices.
The terms and conditions is a simple document that must contain information such as when payments are due and the interest charge. There is also usually information about debt collection and late payments.
Maintaining the invoices and payments is also part of the accounts receivable procedure, and these tasks may be manual or electronic. Electronic maintenance is usually more convenient and easy to track, but some companies still use manual invoicing and payments as of 2015. Both methods help to keep track of what is due and what payments received.
Sending statements is also part of the procedure for the accounts receivable employee. These statements must include all purchases and payments from a certain time frame, and this document also serves as a reminder of any due payments.Learn more about Accounting