ERP Account Receivable
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ERP Account Receivable

Account receivable deals with the customers’ financial connections with the organization’s output. this account helps in maintaining ledgers and personal accounts such as debtors and creditors accounts as a fundamental part of the general ledger.

The main function of account receivable is to track all invoices of the organization that awaits payment from the customers. By definition, accounts receivable are the outstanding invoices an organizations has, inclusive of the money owed to them by clients.

Account Receivable

The fundamental functionality of receivable account involves online credit management. This is where the customers and the organizations would be able to view their transaction statement online and be able to receive payment out of this better credit management by the firm. For reconciliation and control, account receivable is used to classify the accounts, and the organization will be able to find the interests for the late payments.

To control and reconcile similar or related accounts, account receivable is used. Some interest arising from delayed payments that are imposed by the organization are sometimes hard to trace. The account receivable in ERP system helps in easing the trace of these interests.

In order to determine when the debtors are supposed to pay, good record keeping is necessary. The process of determining which debtors are making the payment on time, those that are not paying, and how late are they in making the payment is are done using the concept of account receivable in ERP system.

ERP Account Receivable

This analysis indicates which debtors should make the payment first or otherwise face the interest and they help create a good customer relation through early notification. The company would be able to find out from account receivable report the length of time the amount owed to them have been outstanding and how much the customers owes the company in total.

The management board of the company would be able to determine whether the accounting department have been collecting the receivables very slowly. In addition, the organization would be able to determine from the account receivable aging report if the company is giving out a lot of credit that might undermine her financial stability.

Enterprise Resource Planning Account Receivable

It helps the company to generate and amend the policies, for instance if the company requires the customer to pay for a certain debt within one month, but most of them blows that off and make payment in two months instead, the company might be forced to see the necessity to change that policy.

In conclusion, the accounts receivable functions within an ERP setting is important part of the company and the management should not overlook due to its role in business.

The outstanding invoices the debtors owes the company are determined by this accounts, monitor their credit accounts and regulate the amount given out on credit to customers. Some organizational policies are derived from reports analyzed from observations on this accounts which are good for business’ public promotion. Accounts receivables are legally enforceable for which the company may legally claim the payment be made in the court of law.
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