INTRODUCTION
Finance teams face many challenges in a global economy that is unpredictable, rapidly changing, and extremely competitive. Cash management, specifically, is one of the CFO’s biggest challenges. Concerns include whether sufficient money is being received to meet the needs of the business, the cost of the process, the customer’s experience dealing with the company, and how to protect the company’s cash from fraud. Accounts Receivable (AR) is a strategic process that has a direct impact on the success of an organization’s business plan and goals. To achieve the business plan set by the CFO, the AR process – from setting lines of credit through getting cash in the bank – must be secure, compliant with regulations, efficient, accurate, and timely. Accounts receivable is charged with protecting the cash by eliminating fraud, determining the acceptable degree of bad debt, and collecting monies due the company within terms, while supporting sales. This can be very challenging. Staying current on new payment methods and implementing best-in-class payment processes can make the difference between turning away an order and accepting it.
Supporting sales and protecting the cash (turning an order into cash) requires:
Agreement on the company’s receivables strategy—that is, how the company will use trade credit to maximize profit and cash flow; Thorough review of the current process; Mapping a future that meets the C-Suite goals and objectives, without any pre-conceptions; Knowledge of laws and regulations pertaining to business-to-business (B2B) and business-to-consumer (B2C) transactions;
Knowledge of internal controls needed to protect the cash; and Benchmarking to find the best process for your business plan.
Key performance indicators (KPIs) must support the CFO’s strategy and keep each AR function focused on the end goal on a day-to-day basis.
Because there are errors and inefficiencies in the process from the time the order is taken until payment is received, many businesses are taking a new approach. Through activities such as certification training and benchmarking, companies can discover proven new processes that remove errors, reduce costs, and have a direct impact on customer satisfaction. In today’s age of placing orders electronically, AR is becoming the first face the customer sees at many businesses. This places a new customer-service responsibility on the AR staff in resolving discrepancies and collecting past due accounts while keeping the customer relationship intact. AR therefore has an important role to play in an organization’s competitiveness. This is what makes the AR profession so exciting. It is diverse, complicated, and challenging – with an added dash of risk! This certification program explains the principles, policies, processes, and practices necessary for efficient and effective accounts receivable that meets an organization’s goals: supporting sales, cash flow, and customer service while protecting the organization’s money.
9
THE ACCOUNTS RECEIVABLE SPECIALIST CERTIFICATION PROGRAM E-TEXTBOOK
Made with FlippingBook - Online catalogs