Understanding the Accounts Receivables Process: Tips and Best Practices

3 min read

Introduction to Accounts Receivables Processes

Managing a company’s finances involves dealing with several transactions and obligations, one of which is Accounts Receivables (AR). Accounts Receivables refers to the money a company is owed by its customers or clients for the goods and services sold but not yet paid for. In this article, we will discuss Accounts Receivables in detail and provide some tips and best practices to manage it effectively.

What is Accounts Receivables?

Accounts Receivables is an asset account that tracks the money a company is owed by its customers or clients. It includes all unpaid invoices, bills, and expenses that are yet to be paid. The amount receivable is recorded on the company’s balance sheet and is considered a short-term asset.

Benefits of Proper Accounts Receivables Management

Effective management of Accounts Receivables provides several benefits to a company, including:

  • Better cash flow management
  • Improved customer relationships
  • Reduced bad debt expenses
  • Accurate financial reporting
  • Timely collections


Best Practices for Managing Accounts Receivables

The following are some best practices for managing Accounts Receivables effectively:

Establish a Systematic Process
Having a systematic process in place helps manage the Accounts Receivables process efficiently. This includes having a standard operating procedure (SOP) for creating invoices, following up on overdue payments, and customer management.

Set up Clear Payment Terms
Setting up clear payment terms, including due dates, late fees, and payment methods, helps avoid misunderstandings and disputes. It also enables timely collections and better cash flow management.

Verify Customer Information
Verifying customer information, including contact details, billing address, and creditworthiness, helps reduce the risk of late or non-payment. It also enables timely communication and resolution of any issues.

Use Invoicing Software
Using invoicing software helps streamline the Accounts Receivables process by automating invoice creation, reminders, and collections. It also provides accurate and real-time financial data, reducing the risk of errors and fraud.

Monitor Aging Reports
Monitoring aging reports helps track overdue payments and enables timely follow-up and collections. It also helps identify potential bad debt and allows for proactive measures to avoid it.

Set up a Collection Policy

Establishing a collection policy outlines the procedures for following up on overdue payments and collections. It also helps avoid confusion and disputes and enables timely and consistent collections.

Find a payment solution to help you

Using a payment processing solution like Veem can greatly reduce your AP workload. Here’s how.

  • Time management: Use tools such as recurring invoices to manage your time and send invoices on whatever timeline or schedule you need. Create invoices in advance and have Veem send them to your payers on scheduled dates that you set.
  • Payment Terms: Create clear payment terms and add them to your invoice to be reviewed by the payer. Send automatic payment reminders as well, so that your payers get email notification a few days before an invoice is due, or a day after it’s late.
  • Accounting integrations: If you’re using an accounting software like Quickbooks Online and Xero, you can integrate directly with Veem and have all your ARs pulled over for easy invoicing. Once the invoice is claimed and the payment completes, it will automatically reconcile with your accounting software as well.
  • Reporting: If you’re not integrated with accounting software or just need additional reporting, Veem offers filterable reporting right from your transactions page. Filter and download a report to your device with all your payment information.
  • Client management: Keep track of all your clients information in your “My contacts” section of your Veem account. You can manage, filter and even mass upload new contacts. Use your My contacts section to refer other businesses as well, and earn referral credits.



Effective management of Accounts Receivables is essential for any business’s financial health. Having a systematic process, clear payment terms, verifying customer information, using invoicing software, monitoring aging reports, and setting up a collection policy are some of the best practices to manage Accounts Receivables efficiently. Proper management of Accounts Receivables not only helps improve cash flow and reduce bad debt expenses but also strengthens customer relationships and enables accurate financial reporting. Ready to see how Veem can help with your accounts receivables? Sign up today!



* This blog provides general information and discussion about global business payments and related subjects. The content provided in this blog ("Content”), should not be construed as and is not intended to constitute financial, legal or tax advice. You should seek the advice of professionals prior to acting upon any information contained in the Content. All Content is provided strictly “as is” and we make no warranty or representation of any kind regarding the Content.