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Glossary

Open Items Management

Accounts Receivable Management: Overview

Accounts receivable management is a term from the field of accounting and refers to the systematic recording, management, and monitoring of a company's outstanding receivables and liabilities. Efficient accounts receivable management can improve a company's liquidity and minimize the risk of payment defaults. In the context of modern accounts receivable management, IT-supported systems are often used, enabling automated booking and management of outstanding items.

Accounts Receivable Management: Detailed Explanation

Within the scope of accounts receivable management, all of a company's outstanding receivables and liabilities are recorded, managed, and controlled. This includes outstanding invoices that customers have yet to settle, as well as invoices that still need to be paid to suppliers. Accounts receivable management is an important component of corporate financial management and contributes to ensuring and optimizing a company's liquidity and payment transactions.

Objectives of Accounts Receivable Management

Accounts receivable management pursues several objectives:

  • Improvement of liquidity: Structured recording and management of outstanding items can improve a company's liquidity. This ensures that sufficient financial resources are available to meet ongoing payment obligations.
  • Minimization of payment defaults: Efficient accounts receivable management helps minimize the risk of payment defaults. This is achieved, for example, by early identification of delinquent payers and the initiation of appropriate measures to secure receivables.
  • Optimization of payment transactions: Systematic accounts receivable management can better steer and optimize cash flows. This allows for improved management of incoming and outgoing payments and helps reduce liquidity shortages.

Processes and Methods of Accounts Receivable Management

Accounts receivable management consists of various steps that can be carried out manually or automated:

  1. Recording: All outstanding receivables and liabilities are recorded and stored in a central database or accounting system. This includes information about the contracting parties, invoice amounts, due dates, and any payment reminders or dunning notices.
  2. Management: As part of the management process, outstanding items are organized and categorized according to various criteria, such as due dates, the amount of the receivable or liability, or customer and supplier groups. This creates a structured overview of the company's financial situation.
  3. Control: The control of outstanding items includes regular checks of due dates and the initiation of appropriate measures in case of late payments, such as sending payment reminders, dunning notices, or initiating legal steps to recover debts.
  4. Evaluation: The collected data are evaluated to check the efficiency of accounts receivable management and to initiate potential optimization measures. This includes, for example, the analysis of payment behavior, maturity structures, and liquidity development.

IT-Supported Accounts Receivable Management

In the context of modern accounts receivable management, IT-supported systems are often used that enable automated booking and management of outstanding items. These include, for example, ERP systems (Enterprise Resource Planning) or specialized software solutions for financial management. These systems offer numerous advantages over manual methods:

  • Increased efficiency: The use of IT-supported systems can automate and accelerate workflows. This leads to higher efficiency and a reduction in sources of error.
  • Transparency: The central recording and management of outstanding items in an IT system provide improved transparency and faster availability of information.
  • Flexibility: IT-supported accounts receivable management systems are usually modular and can be adapted to a company's individual requirements. This allows for flexible design of accounts receivable management and integration into existing business processes.

In summary, accounts receivable management is a central aspect of corporate financial management and significantly contributes to ensuring liquidity and minimizing payment defaults. By using modern IT-supported systems, the efficiency and transparency of accounts receivable management can be further increased.