An Accounts Receivable Clerk prepares accounts receivable transactions and processes customer payments. Duties and Responsibilities of an Accounts Receivable Clerk. They also create invoices according to company practices and submit them for approval by management or clients.
Accounts receivable, abbreviated as AR or A/R, are legally enforceable claims for payment held by a business for goods supplied or services rendered that customers have ordered but not paid for. The accounts receivable process involves customer onboarding, invoicing, collections, deductions, exception management, and finally, cash posting after the payment is collected. These are generally in the form of invoices raised by a business and delivered to the customer for payment within an agreed time frame. Accounts receivable is shown in a balance sheet as an asset. It is one of a series of accounting transactions dealing with the billing of a customer for goods and services that the customer has ordered. These may be distinguished from notes receivable, which are debts created through formal legal instruments called promissory notes.
Payment terms
An example of a common payment term is Net 30 days, which means that payment is due at the end of 30 days from the date of invoice. The debtor is free to pay before the due date; businesses can offer a discount for early payment. Other common payment terms include Net 45, Net 60, and 30 days end of month. The creditor may be able to charge late fees or interest if the amount is not paid by the due date.
In practice, the terms are often shown as two fractions, with the discount and the discount period comprising the first fraction and the letter ‘n’ and the payment due period comprising the second fraction. For instance, if a company makes a purchase and will receive a 2% discount for paying within 10 days, while the whole payment is due within 30 days, the terms would be shown as 2/10, n/30.
Booking a receivable is accomplished by a simple accounting transaction; however, the process of maintaining and collecting payments on the accounts receivable subsidiary account balances can be a full-time proposition. Depending on the industry in practice, accounts receivable payments can be received up to 10–15 days after the due date has been reached. These types of payment practices are sometimes developed by industry standards, corporate policy, or because of the financial condition of the client.
Since not all customer debts will be collected, businesses typically estimate the amount of and then record an allowance for doubtful accounts which appears on the balance sheet as a contra account that offsets total accounts receivable. When accounts receivable are not paid, some companies turn them over to third party collection agencies or collection attorneys who will attempt to recover the debt via negotiating payment plans, settlement offers, or pursuing other legal action.
Outstanding advances are part of accounts receivable if a company gets an order from its customers with payment terms agreed upon in advance. Since billing is done to claim the advances several times, this area of collectible is not reflected in accounts receivables. Ideally, since advance payment occurs within a mutually agreed-upon term, it is the responsibility of the accounts department to take out the statement showing advance collectible periodically and should be provided to sales & marketing for collection of advances. The payment of accounts receivable can be protected either by a letter of credit or by Trade Credit Insurance.
What makes a good Accounts Receivable Clerk?
To be a successful Accounts Receivable Clerk, you need excellent research and record-keeping skills. You also should possess superior communication abilities and strong math or computer knowledge so that your work is accurate and timely.
Who does an Accounts Receivable Clerk work with?
Typically, an Accounts Receivable Clerk works directly with customers to help them make the proper payments for goods and services. An Accounts Receivable Clerk reports to the Accounting and Administrative Manager to ensure customers make their payments on time.
Accounts Receivable Clerk Duties:
- Maintain accurate and detailed financial records and reports
- Update and maintain records
- Maintain files
- Proactively generate reports
- Maintain physical inventory
- Follow established protocols and procedures
- Proactively act to resolve discrepancies
- Maintain confidentiality
Accounts Receivable Clerk Responsibilities:
- Perform routine billing and collection activities on customer accounts and invoices, including collecting on delinquent accounts, and recommending account termination
- Make outbound calls to collect outstanding balances on overdue accounts, and answer customer questions on billing and payment policies
- Maintain customer accounts by processing invoices, and following-up on payments
- Work with customer representatives to resolve problems
- Update data daily to include past due balances
- Communicate with sales customers on account statuses
- Work remotely from home
