Accounts Receivable

With an effective strategy, you can ensure that your business receives money from clients on time, every time.

Accounts Receivable

With an effective strategy, you can ensure that your business receives money from clients on time, every time.

Why Accounts Receivable is Important for Your Business

Promotes steady cash flow

Gives accurate view of business finances

Helps keep bad debt at bay

Ensure financial obligations are met

Helps attract investors

Accounts receivable (AR) refers to payments your business receives from customers in exchange for goods or services purchased on credit. It differs from accounts payable (AP), which handles the money your business owes to suppliers and creditors. 

AR management isn’t just about determining a suitable credit period; it’s an important part of ensuring a steady cash flow, which is vital for business success.  

Our expert team of outsourced bookkeepers and accountants can improve your accounts receivable processes. We can help you manage transactions to help you improve turnover, lower your accounts receivable turnover ratio, and improve profitability. This gives you access to a collaborative ecosystem that supports the evolution of your financial processes.

Whether it’s a quick consultation or a longer-term project, we can assist you with: 

  1. Implementing effective AR systems
  2. Software integration and support
  3. Capacity and skills training
Fusion CPA is an outstanding resource for outsourced financial service needs. Whether it's bookkeeping, reporting, clean-up, compliance, tax planning or strategic business planning, Fusion CPA has always been a tremendous resource for me and my clients.

Why accounts receivable turnover is important

Accounts receivable turnover (ART) is often called the debtor’s turnover ratio. This ratio tells you how effectively your company collects revenue, and indicates how well your business uses its assets over time.

Many businesses see ART as the defining metric to evaluate the effectiveness of accounts receivable processes. It’s also a useful tool for competitor analysis and benchmarking; by comparing your ART ratio with other firms in your industry, you can gain insight into how you are performing against your competition.

ART is calculated using the accounts receivable turnover formula. 

Five Best Practices for Accounts Receivable Management

Clearly communicate your payment terms to customers and implement clear AR collection policies about addressing overdue accounts.

Pay close attention to when invoices are sent and payments are due, while consistently matching customer payments to outstanding invoices.

Automating your billing and payment processes can help you keep track of AR, while saving you time and reducing the risk of human error.

Keep track of performance performance metrics like accounts receivable turnover (ART), days sales outstanding (DSO), and average days delinquent (ADD).

Running reports will help you identify payment trends and customers who are frequently late. This can help you improve your processes and identify ways to streamline collections.

Following up on collections can be time-consuming. Thankfully, accounts receivable software can help you determine if you need to tighten credit or intensify your collection efforts.

This type of software applies unique formulas to your receivables collections to help you decide which customers are taking longer to pay. That way, you’ll know if you need to strengthen your policies for extending credit or collecting more vigorously. 

If your accounting software isn’t up to the task, Fusion CPA can help you choose and integrate the best solution for your business. With over 20 years’ of experience in the industry, our team recommends these software options:

We recommend these comprehensive software options:

Our Services Can Scale With Your Business

At Fusion CPA, we offer a host of outsourced accounting services. Whether you need accounting, bookkeeping, or controller services, we can provide you with the perfect solution. Our accounting experts have years of experience and expertise across different industries.