Accounts Receivable Job

Accounts Receivable

Money owed to the company by customers. This person’s job is to track invoices, payments, and fix errors

Accounts Receivable Cycle

• Product/service delivered.

• Invoice generated and sent.

• Payment received or disputed.

• Payment applied to correct invoice(s).

• If disputed/incorrect, investigate → resolve → update records.
  Without this cycle working smoothly, the company can’t collect money efficiently.

Aging Report

A report showing unpaid invoices by how overdue they are (30/60/90+ days). Helps prioritize collections. It’s like a “report card” of who’s paying on time. Finance teams use this to see cash flow health.

Journal Entry

A record of money moving in/out (credits/debits). Keeps financial records accurate. 

Reconciliation

Comparing two records (invoice vs. payments) to make sure they match. Fix differences if not.

Credit Memo

Document that reduces how much a customer owes (discount, return, adjustment)

Debit Memo

Document that increases how much a customer owes (extra fees, corrections)

Dispute Management

Handling customer claims that an invoice is wrong (missing discount, wrong price, damaged goods). Could be about wrong pricing, missing discounts, damaged shipments, or short deliveries. Your job is to gather evidence (invoice, shipping docs, promo terms) → verify claim → either approve a credit or reject the claim.

Cash Application

Applying incoming customer payments to the correct invoices.

VLOOKUP / Index - Match

Excel functions that match info between two lists (ex: match invoice to payment)

Pivot Tables

Excel tool that summarizes large data sets (ex: total unpaid invoices by customer).

Conditional Formatting

Excel feature that highlights data automatically (ex: overdue invoices turn red).

Enterprise Resource Planning (ERP)

Big company software that tracks sales, inventory, and payments. Your main finance system. Examples: SAP and Oracle

FDCPA (Fair Debt Collection Practices Act)

Law that says collections must be professional and fair (no harassment/threats).

UCC (Uniform Commercial Code)

Rules for contracts and transactions across states. Governs disputes on shipping, invoicing, and payments.

Contracts / Promotions

Agreements with customers. Always check terms before adjusting invoices.

Data Confidentiality

Customer and financial info is private. Never share outside proper channels.

Process Improvement

Suggest small ways to reduce errors or speed up tasks (Lean Six Sigma mindset).

Industry Knowledge

Milwaukee Tool sells through distributors like Home Depot/Lowe’s. Knowing retail flow helps understand claims.

Variance Analysis

Comparing actual results vs. expected results (budget/forecast). Example: Sales expected $500k, actual was $470k = -$30k. Analysts explain “why” (pricing errors, discounts, delays).

Key Performance Indicators (KPIs)

Metrics that show business health. For AR: Days Sales Outstanding (DSO = how long it takes to collect cash), % overdue invoices, bad debt %. Analysts track and report these to management.

Days Sales Outstanding (DSO)

Formula: (Accounts Receivable ÷ Total Credit Sales) × # of Days. Measures how quickly customers pay. Lower DSO = healthier cash flow.

Root Cause Analysis

Asking “why” until you find the underlying reason for a problem. Example: Late payment → why? Invoice incorrect → why? Discount not applied → why? Promo wasn’t entered. Analysts think in causes, not just fixes.

Data Visualization (Power BI/Tableau)

Tools that turn data into dashboards and charts. Example: Chart overdue balances by region, customer, or sales rep. Analysts use visuals to tell stories to managers.

Revenue Recognition

Rules for when a company can record sales as revenue. Important for understanding “timing” of AR vs. actual sales.

Gross Margin

(Revenue – Cost of Goods Sold) ÷ Revenue. Analysts often track how disputes/discounts affect margin.

Working Capital

Current Assets – Current Liabilities. AR is a key driver of working capital; analysts monitor this to see if cash is tied up.

Cash Flow Impact

Delayed AR = less cash for the company. Analysts explain how improving AR speeds up cash flow for investment.