Elevate your organization's financial management, streamline your receivables process, and enhance cash flow with this Accounts Receivable Policy. This tool provides clear, actionable guidelines that empower businesses to maintain accurate records, enforce robust internal controls and adhere to industry best practices in billing, collections and risk management. Implementing the principles outlined in this policy will help you minimize bad debt exposure, achieve greater consistency in accounting processes, and ensure compliance with relevant regulations, all while optimizing your revenue cycle.

This tool includes four samples that cater to various aspects of accounts receivable management. Sample 1 establishes consistent guidelines for reserving, writing off and recovering receivables, aligning actions with company philosophy. Sample 2 focuses on day-to-day procedures for processing billings and cash receipts, ensuring timely invoicing and secure payment handling. Sample 3 outlines standards for accurately recording and reporting trade accounts receivable, including allowances for doubtful accounts and sales returns. Sample 4 presents performance measurements and targets, helping organizations evaluate the effectiveness of their receivables management and maintain optimal operational efficiency.

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.
• Unearned customer discounts should be identified, assessed for collectability and written off when deemed uncollectible.
• Monthly reconciliations should be performed to agree the accounts receivable subledger balance to the general ledger.