What Is an Accounts Receivable Job Description?

An Accounts Receivable (AR) role focuses on managing the money owed to a business for goods or services already provided. This directly impacts a company’s liquidity and operational capacity. Effective management of these incoming payments is essential for maintaining healthy cash flow, allowing a business to cover expenses and invest in growth. The AR job is central to a company’s financial inflows.

Core Responsibilities and Daily Tasks

A primary responsibility for Accounts Receivable professionals involves generating and dispatching accurate invoices to customers. These documents include essential details like the business name, address, invoice number, issue date, due date, and itemized goods or services with quantity, unit price, and total amount. Payment terms, such as “Net 30” or “Due Upon Receipt,” are also specified.

Recording incoming payments and applying them correctly to outstanding invoices is another daily task, known as cash application. Payments arrive through various methods, including Automated Clearing House (ACH) transfers, wire transfers, physical checks, or credit card transactions. The AR specialist matches each payment to its corresponding invoice in the accounting system. This process includes handling overpayments, underpayments, and applying approved discounts or credits.

Following up on overdue accounts, commonly referred to as collections, is an important part of the role. This involves professional communication with customers through phone calls, emails, or formal collection letters. The goal is to secure payment while preserving the customer relationship, often by understanding the reason for delay and offering solutions. Maintaining a consistent follow-up schedule helps reduce the aging of receivables.

Reconciliation tasks involve comparing internal accounting records with customer payment statements to resolve discrepancies. This process ensures the company’s ledger and customer records align regarding outstanding balances. Investigating unmatched payments or unapplied cash requires attention to detail and communication with customers. Resolving these variances ensures accurate financial reporting.

Preparing various financial reports for management is a regular duty. This includes creating aging reports, which categorize outstanding invoices by their due date (e.g., 0-30, 31-60, 61-90, and over 90 days past due). These reports provide insights into the company’s credit risk and collection efforts. AR professionals also contribute to cash flow forecasts by projecting expected incoming payments, assisting financial planning.

Providing customer service related to invoices and payments is an ongoing responsibility. AR specialists serve as the first point of contact for customer inquiries regarding billing errors, payment terms, or account balances. Addressing these questions promptly and accurately helps maintain positive customer relationships and facilitates timely payments. This requires a clear understanding of billing policies.

Required Skills and Qualifications

Proficiency in various software and a foundational understanding of accounting principles are important for an Accounts Receivable role. Experience with general ledger accounting and the ability to process debits and credits accurately are fundamental. Strong data entry skills, including speed and precision, are necessary for inputting invoice and payment information into accounting systems.

Competence with spreadsheet software, particularly Microsoft Excel, is widely expected. AR professionals use Excel for tasks such as creating detailed reports, performing complex reconciliations, and analyzing large datasets. Familiarity with specific accounting software, such as QuickBooks for smaller businesses or enterprise resource planning (ERP) systems like SAP or Oracle for larger corporations, is also very beneficial.

Beyond technical abilities, several soft skills contribute to success in an Accounts Receivable position. Strong communication skills, both written and verbal, are important for interacting with customers regarding payments and resolving disputes. This includes drafting clear emails and conducting professional phone conversations during collection efforts. The ability to articulate complex financial information in an understandable manner is helpful.

Attention to detail is important, given the precise nature of financial record-keeping and reconciliation. Problem-solving abilities are tested when investigating payment discrepancies or addressing customer billing issues, requiring a methodical approach to finding solutions. Strong organizational skills and effective time management are important for handling multiple accounts, tracking various due dates, and prioritizing collection efforts.

Many entry-level Accounts Receivable positions accept candidates with a high school diploma or equivalent. An associate’s or bachelor’s degree in accounting, finance, or a related business field is preferred for roles with greater responsibility. Previous experience in an AR department or a general accounting role, often one to three years, is sought by employers.

Tools and Systems Used

Accounts Receivable professionals utilize various software and systems to manage daily tasks efficiently. Enterprise Resource Planning (ERP) systems, such as SAP, Oracle, or NetSuite, are common in larger organizations. These integrated platforms encompass multiple business functions, including finance, sales, and inventory management, allowing AR teams to access comprehensive customer and transaction data.

Dedicated accounting software, like QuickBooks or Xero, is widely used by small and medium-sized businesses for managing financial transactions. These programs streamline invoicing, payment tracking, and financial reporting. Such software often includes features for automated reminders and basic reporting functions.

Customer Relationship Management (CRM) systems, while primarily focused on sales and marketing, are beneficial in AR. These systems help track customer interactions, communication history, and payment preferences. This information is useful during collection efforts or when addressing customer inquiries.

Payment processing platforms, such as Stripe or PayPal, facilitate and track electronic payments from customers. These platforms integrate with accounting systems to ensure accurate and prompt payment recording. They often provide real-time transaction data, aiding efficient cash application.

Spreadsheet software, particularly Microsoft Excel, is a primary tool for Accounts Receivable tasks. While other systems automate many processes, Excel is used for detailed data analysis, creating customized reports, and performing complex reconciliations. Its flexibility allows AR professionals to manipulate and interpret large datasets.

Career Outlook

An Accounts Receivable position offers a clear pathway for career progression within finance and accounting. Individuals often begin as an Accounts Receivable Specialist, handling daily transactional duties. Strong performance and a grasp of the revenue cycle can lead to roles such as Accounts Receivable Coordinator, overseeing accounts, or Accounts Receivable Supervisor, managing a team.

Further advancement can lead to an Accounts Receivable Manager position, involving strategic oversight of the AR function, policy development, and process improvement. The experience gained in AR is transferable, providing a foundation for transitioning into other finance or accounting roles. Many AR professionals move into positions such as General Accountant, handling broader financial record-keeping, or Financial Analyst, interpreting financial data to guide business decisions.

Experience in managing customer credit and collections can lead to a Credit Manager role, focusing on assessing creditworthiness and managing risk. The skills developed in an AR role, including financial reconciliation, data analysis, and professional communication, are valuable across various business functions. These competencies make AR experience a stepping stone for diverse career paths within corporate finance.

The job market for Accounts Receivable professionals shows consistent demand. Businesses across all industries rely on effective AR management to maintain healthy cash flow and financial stability. The ongoing need to manage incoming payments, reconcile accounts, and ensure timely collections ensures a steady requirement for skilled AR professionals. This demand highlights the role’s value as a foundational element of any business’s financial operations.