How does an AR specialist help improve your business?

Author : qxfa us | Published On : 20 Jan 2022

An AR specialist or AR clerk is considered to play a key role in ensuring the efficacy of the order-to-cash function. You can hire an AR specialist if maintaining AR in-house or get access to the same when you opt for accounts receivable outsourcing. Either way, the AR clerk is broadly responsible for ensuring the proper functioning of the AR department and maintaining updated records of the same. 

Along with the credit manager or the AR manager, the AR specialist also forms a part of your AR management workflow. But his duties are more specific and relate to: 

  • Raising the invoice: Invoices have to be raised for all goods and products procured by customers from your company. But these invoices have to follow certain statutory compliances and need to include important information regarding the quantity and price of the goods purchased.  

The job of the AR specialist includes: 

  • Ensuring accuracy of the information incorporated in the invoice 

  • Raising and sending the invoice to your customers on time   

  • Resolution of payment discrepancies: This can arise due to errors in the invoice terms and conditions or a misunderstanding on the part of the customer. These disputes need immediate resolution since they can lead to payment delays and the formation of bad debts, if left unresolved. The AR specialist also has to ensure quick resolution of all customer invoice disputes so that your company payment realisation does not get affected. If, required, he will also have to liaison with other involved business verticals to ensure quick resolution of customer invoice issues.  

  • Timely payment resolution: The accounts receivable specialist has to ensure everything from sending gentle reminders to your customers about impending payment due dates to ensuring reduction in the DSO. This is, perhaps, the most challenging part of the job since, the AR clerk has to ensure timely payment collection and maintain high-standards of customer relationships. 

  • Payment reconciliation: The order-to-cash process does not end with the actual realisation of the outstanding. The AR specialist has to log the payment received into the system and close the invoice outstanding. This completes the process of payment realisation and reconciliation. It also reduces the DSO and prevents debts from ageing. Proper reconciliation also enhances the accuracy of your company AR system by eliminating chances of seeking for duplicate payments from clients and spoiling client relationships.  

  • Maintaining records: The accounts receivable clerk also has to ensure complete updation of all your company AR records in real time. From maintaining a record of the credit cycle to the daily outstanding, the payment terms of individual clients, looking into their credit history, keeping a track of applicable discounts and incentives for early payments etc., all records have to be accurately maintained. While manual processes tend to enhance the appearance of errors, using automated systems as is available with AR service providers helps to enhance the work output quality of these AR specialists.  

  • Report generation: To be aware of everything taking place within the company, your management requires reports to be generated in customised formats. The AR specialist is responsible for generating all AR-based reports as per the requirements of your company management.  

  • Aged-debt recovery: Almost every organisation has certain debts that have crossed their recovery dates. These debts are known as aged debts. Some reasons for the formation of the same might be late resolution of customer issues, absence of payment follow-ups, delivery of wrong materials etc. Realisation of such debts is time-consuming and challenging. Since this forms an integral part of accounts receivable accountingthe AR specialist also has an important role to play in the recovery of aged debts for your company. 

The scope of work of an AR specialist is quite vast and the role that he plays is crucial to ensure the financial health of your company. By ensuring consistent cash flow, he helps to strengthen the working capital of your company thereby ensuring that employee and vendor payments are made on time. Hence, having a good AR specialist looking after your company accounts benefits your company across verticals.