Accounts Receivable Management


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  • 9
    Lessons
  • 11
    Exams &
    Assignments
  • 5
    Hours
    average time
  • 0.5
    CEUs
  • 2,568
    Students
    have taken this course
 
 
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Course Description

Accounts Receivable management is a demanding job. You'll be making decisions that can make or break a company. Your role is unique and complex--one that is closely integrated into the overall customer service of your company. In this course, we'll look at what exactly AR is, what it is you're going to be doing, what you'll need to know to get started, why your company needs an accounts receivable department to begin with, and what some of the keys are to a successful accounts receivable department.

In this course, we're going through all the basics. You don't need any prior accounts receivable experience or knowledge to successfully complete this course. Using a 'ground-up' approach, we'll be covering topics such as 1. approving credit, 2. the billing process, 3. collecting money, 4. customer service, 5. handling deductions, 6. legal considerations, 7. bankruptcy, as well as many other important topics.
 
So come join the fun...Let's get started now!

Why an Accounts Receivable Department?

 

Perhaps you did not have to deal with this question in the past, when you were a clerk. As a manager, you will have to deal with this question nearly every single day. Sales staff will come running to you, trying to get you to lighten up on your credit qualifications in order to make additional sales. Managers and those who are paid off the bottom line might prefer that you tighten up the credit qualifications so that there are fewer bad debts that have to be written off.

At the end of the day, there is an accounts receivable department because it should increase revenues to the company.

Here's an example:

Imagine XYZ, Inc., a small company that sells just one product, widgets, and it currently sells one widget per day at $10 per widget. That means it sells 365 widgets per year and earns an income of $3,650, from which the company has no problem meeting expenses and paying your salary. Let us say for a moment that there is a profit of $4 per widget, or $1,460 per year.

Now imagine that company officials want to increase sales. One way they do this is by selling widgets on credit. They accept credit cards, for which they pay a $1 fee per transaction. Suddenly, people who want to buy widgets but never have handy cash can now buy one. Even though XYZ, Inc.. absorbs the $1 fee, it is now selling twice as many widgets: one a day with cash and one a day with credit cards. Therefore, the company is earning $2,555 in profit each year; that is, $1,460 from $4 profit per widget per day in cash sales and $1,095 per widget per day in credit card sales.

Later, upper management decides to allow people to buy on credit. There is no credit card fee, so profit will be $4 per widget. Your analysis as a manager suggests that you will collect about 80 percent of all widget purchases on credit but you will increase sales by 100 percent. Let us look at how your profit margins break down now.

Cash sales: 365 widgets x $4/widget = $1460

Credit card sales: 365 widgets x $3/widget = $1095

Credit sales: 365 widgets x $4/widget less $730 (which is 20% uncollectible of $3650) = 730

TOTAL PROFIT: $3285 on 1095 widgets, or, $3/widget.

Of course, these are just example numbers meant to show you that selling something on credit, even if there is an element that no one ever expects to collect, could end up profitable.
 
That likely will be another job that you, as an accounts receivable manager, will have to figure out. In conjunction with other departments, such as your accounts payable department, you will need to determine the total profit on a product and what the impact will be if certain parts of the debt remain uncollectible. For example, if your research determined that 40 percent of the debt was uncollectible rather than 20 percent, your company may think twice about selling on credit, since that would eat up all of your profit. But, even at 40 percent uncollectible debts, in which your company is earning no profit on that third of your widgets, the decision may still be made to continue selling the product.

Why? There are a number of reasons that you probably did not have to think about when you were a clerk, but now you do:

  •  An accounts receivable list, even one with some uncollectible debts,is worth something to a company; it's an asset.
  •  With proper training and staffing, you might get employees to collect from some of this list eventually, realizing a profit in the distant future.
  • If the price of widgets purchased on credit is raised slightly over other types of purchase, you might still recoup some of your potential profit.
  •  It could be considered a loss leader in which you got people in your door and they were happy with your widget, even if they did not pay. That is one less person you have to convince with your marketing, and there is a good chance they will use your business in the future or recommend it to their friends.
  •   Creating 1,095 widgets instead of 365 could give you an economy of scale when it comes to purchasing raw materials and manufacturing, resulting in a general rise in profits on all widgets.
  • If widgets need to be stored, the cost of 40 percent of uncollectible debts on widgets could be more than storage and inventory costs if those units were not sold.
  • 40 percent uncollectible debts could be considered demonstrators when you think about it: Somewhere out there are 146 widget-users who may not have paid for their widget but are using it. Others see it, with your brand name clearly emblazoned on the side, and want one.

Did anything on this list surprise you? The bright side of uncollectible debts is not that bad at all! One of your determinations as a manager will have to be the comparison in values between what you are losing in income and profits with uncollectible debts and what you are gaining.

Back to the question we were trying to answer: Why an accounts receivable department?

The answer is simple: because sales on credit can increase revenue and profits.

The Keys to a Successful Accounts Receivable Department

There are a couple of keys to a successful accounts receivable department:

 

  1. Realize that you are a significant decision-making force in the company whose policies can make or break it. Be thoughtful and seek advice when weighing the costs and benefits of your decisions.
  2. You are part of a customer service sphere in your company, which also includes sales associates and customer service representatives. You interact with customers when they owe money. In some cases, this is one of the hardest places to provide good customer service because some customers have the product but do not want to part with their money. Your job is to make sure they pay willingly and are still happy enough to buy products from your company again.

Issues in Accounts Receivables

 
Here are the issues you will face as an accounts receivable manager:
  • Creating credit policies: how much to extend, for how long, and at what interest rate.
  • Creating qualification policies: who gets credit, who does not, and what is required to get credit.
  •  Creating billing procedures: establishing when bills are sent out, when reminders go out, and when the final notices follow.
  • Creating collection procedures: deciding what steps to follow in collecting, who does the collecting, when it gets done, and what happens if only some or no money is collected, or in the event all the money is collected.

Accounts Receivable as an Asset


Your accounts receivable list is a liquid asset to your company because it could be converted into cash within a year if necessary. If your company is expanding or in need of some fast cash, your accounts receivable list can be:
 
  • Used as security against a loan.
  • Sold as cash to a company specializing in receivables. 
 
Do you have a natural aptitude for "crunching numbers?"

Do financial statements, annual reports and invoicing policies just somehow make sense to you?

Or perhaps you've recognized some room for improvement in your Accounts Receivable Management skills and experience?

If any of these situations sounds familiar to you, then this course on the ins and outs of accounts receivable management may be just what you need in order to get things all squared away.

Be warned though--you're in for a demanding job. As a part of your company's accounts receivable management team, you'll be responsible for making decisions that have the potential to make your break your bottom line. Enrolling in this class can make navigating those decisions successfully a whole lot easier.
Along the way, you'll gain a clearer understanding of the class's five basic objectives:
  • A comprehensive knowledge of what Accounts Receivable is
  • The duties the job entails
  • The information you'll need before you can get started
  • The needs an accounts receivable department meets within an organization
  • Plus, the keys to managing a successful accounts receivable department

While the structure of the course assumes that you have at least some type of experience in the accounts receivable arena, you can still succeed in the class without AR or management experience.

The class follows a self-paced, self-contained format that gives you the freedom to learn and participate when (and only when) your schedule permits. There are no textbooks or software programs REQUIRED for course enrollment, but there is a recommended reading list for those in search of a deeper understanding of the subject matter.

Enroll today to bring more value to your career and your company!

  • Completely Online
  • Self-Paced
  • Printable Lessons
  • Full HD Video
  • 6 Months to Complete
  • 24/7 Availability
  • Start Anytime
  • PC & Mac Compatible
  • Android & iOS Friendly
  • Accredited CEUs
Universal Class is an IACET Accredited Provider
 
 

Course Lessons

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Accounts Receivable Manager

This lesson is designed for the new manager, so the assumption is made that you have not worked as a manager, although you may be management material. 101 Total Points
  • Lesson 1 Video
  • Take Poll: Accounts Payable Manager
  • Complete Assignment: My A/R experience
  • Complete: Lesson 1 Exam: AR Manager

Approving the Credit

In this lesson, we are going to look at the very beginning of the credit and receivables process: the process of approving credit. 82 Total Points
  • Lesson 2 Video
  • Review 2 Articles: Credit Card Processing; Developing a Credit Policy
  • Complete Assignment: Credits
  • Complete: Lesson 2 Exam: Credits

The Process of Billing

Billing your customer is a way to keep in contact with them to remind them to pay. In this lesson, we will look at an ideal billing procedure, and we will prepare you for some challenges you might face. 100 Total Points
  • Lesson 3 Video
  • Review Article: Sample Invoices
  • Complete: Lesson 3 Exam: The Process of Billing

The Process of Collecting the Money

In this lesson, we will look at the collection process step by step. We will look at how you can manage phone calls, show you how to overcome each of the most common excuses a customer can give you, and look at how you can motivate a customer to pay. 100 Total Points
  • Lesson 4 Video
  • Review Article: Collections
  • Complete: Lesson 4 Exam: The Process of Collecting the Money

Customer Service, Internal Controls and the Annual Audit

In this lesson, we are going to look at three areas where you will need to have your finger on the pulse of your company: customer service, internal controls to prevent error and theft, and the company audit. 80 Total Points
  • Lesson 5 Video
  • Review Article: How to Ask for Payment Politely
  • Complete: Lesson 5 Exam: Customer service, internal controls and the annual audit

Handling Deduction Issues, Letters of Credit, and Other Security Interests

During your tenure as an accounts receivable manager, you will find there are higher level issues to deal with than when you were a clerk in the same department. Three of these issues are discussed here and how you can manage them. 80 Total Points
  • Lesson 6 Video
  • Review 2 Articles: Letters of Credit; Discounts
  • Complete: Lesson 6 Exam: Handling Deduction Issues, Letters of Credit and other Security Interests

Legal Considerations Surrounding Credit

There are some legal considerations surrounding the credit and collection industry. One obvious one that we will not even go into here is that violence is not an alternative to legal collections methods. There are, however, several other areas where it co 80 Total Points
  • Lesson 7 Video
  • Review Article: Making Collection Calls
  • Complete: Lesson 7 Exam: Legal Considerations Surrounding Credit

Bankruptcy

Our economic system gives us an opportunity to "reset" our financial situation if it ever gets out of hand. As consumers, it is nice to have that safety valve, especially to deal with circumstances beyond our control. 100 Total Points
  • Lesson 8 Video
  • Review Article: Bankruptcy Types
  • Complete: Lesson 8 Exam: Bankruptcy

The Use of Technology in the Credit and Collections Agency

Technology can be a good thing in some businesses and a bad thing in others. In the credit and collections world, technology is very useful. 80 Total Points
  • Lesson 9 Video
  • Take Poll: How would you rate this course?
  • Take Survey: Program Evaluation Follow-up Survey (End of Course)
  • Complete: Lesson 9 Exam: The Use of Technology in the Credit and Collections agency
803
Total Course Points
 

Learning Outcomes

By successfully completing this course, students will be able to:
  • Identify the role and job responsibilities of an Accounts Receivable Manager.
  • Approve credit for the right customers.
  • Outline the process of billing customers.
  • Outline the processes of collecting money.
  • Know the need for quality customer service as well as place internal controls.
  • Handle deduction issues, Letters of Credit and other security interests.
  • Know legal considerations surrounding credit.
  • Deal with bankruptcy.
  • Use technology in the Credit and Collections process, and
  • Demonstrate mastery of lesson content at levels of 70% or higher.
 

Additional Course Information

Online CEU Certificate
  • Document Your Lifelong Learning Achievements
  • Earn an Official Certificate Documenting Course Hours and CEUs
  • Verify Your Certificate with a Unique Serial Number Online
  • View and Share Your Certificate Online or Download/Print as PDF
  • Display Your Certificate on Your Resume and Promote Your Achievements Using Social Media
Document Your CEUs on Your Resume
 
Course Title: Accounts Receivable Management
Course Number: 31060
Languages: English - United States, Canada and other English speaking countries
Category:
Course Type: Professional Development (Self-Paced, Online Class)
CEU Value: 0.5 IACET CEUs (Continuing Education Units)
CE Accreditation: Universal Class, Inc. has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET).
Grading Policy: Earn a final grade of 70% or higher to receive an online/downloadable CEU Certification documenting CEUs earned.
Assessment Method: Lesson assignments and review exams
Instructor: Linda Zavadil
Syllabus: View Syllabus
Duration: Continuous: Enroll anytime!
Course Fee: $50.00 (no CEU Certification) || with Online CEU Certification: $75.00

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Student Testimonials

  • "I learned so much in these lessons." -- Sylvia T.
  • "Excellent." -- Maribel D.
  • "Details on the role of the manager were very helpful as were the "True Accounts."" -- Ann R.
  • "I did get a better insight of how to manage Accounts Receivable....The instructor did a great job and was very fast in answering my questions. I am taking another course and hope I get the same instructor." -- Doris M.
  • "GREAT CORSE AND INSTRUCTOR." -- Jack D.
  • "It was a very good course to brush up on my skills." -- KayJean R.

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