Accounts Receivable Department — what does an Accounts Receivable Department do?

. 1 min read

The Accounts Receivable (AR) department is responsible for managing a business entity’s cash flow. AR responsibilities often extend beyond preparing and sending invoices, including:

  • Establishing and enforcing credit policy and payment terms
  • Recording payments and reconciling them with the AR ledger
  • Creating aging reports to keep track of late or delinquent payments
  • Sending bill reminders and requesting late or delinquent payments
  • Preparing periodic statements about company cash flow

Depending the size of the organization, the AR department will often use financial technology, such as accounts receivable automation software, optimize their workflows, often saving money and time. Accounts Receivable might also be managed alongside Accounts Payable in the same department, though this is less common in larger organizations with more complex financial positions.