Our Accounts Receivable Policy is designed to strengthen financial operations by providing clear, actionable guidelines for managing receivables. Its purpose is to ensure that organizations maintain accurate records, enforce proper internal controls and follow industry best practices for billing, collections and risk management. By implementing the principles and procedures outlined in this tool, companies can improve cash flow, minimize bad debt exposure and achieve greater consistency and transparency in their accounting processes, all while staying compliant with relevant regulations. This resource is crafted to spark interest and deliver real value, making it essential for any business seeking to optimize its revenue cycle.

This tool includes three samples, each addressing different aspects of accounts receivable management. Sample 1 focuses on establishing consistent guidelines for reserving, writing off and recovering receivables, ensuring that all actions align with company philosophy and operational needs. Sample 2 delves into the day-to-day procedures for processing billings and cash receipts, emphasizing timely invoicing, secure handling of payments and regular reconciliation to maintain accuracy. Sample 3 offers detailed standards for recording, valuing and reporting trade accounts receivable, including the creation of allowances for doubtful accounts, sales returns and discounts, as well as guidance on segregation of duties, reconciliations and reporting requirements. Together, these samples provide a framework adaptable to diverse business environments, equipping organizations with the tools needed to manage receivables effectively.

Sample procedures include:

• Enter all receipts into the accounting system on a one-business-day lag from the time they are deposited into the company’s bank account.
• Refer to the company’s Credit and Collection Policy.
• Funds received in the mail for trade accounts receivable should be deposited to the business unit’s lock box in a timely manner.
• Monthly reconciliations should be performed to agree the accounts receivable subledger balance to the general ledger.