Accounts Receivable Best Practices

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Do you feel like your accounts receivable process is causing undue risk to your business? Is your team stretched thin by struggling to keep up with all of your customer transactions? If you’re looking to optimize your accounts receivable process, this course is for you!

This foundational course will help you learn how to design and manage an accounts receivable process that minimizes collection time and write-offs without compromising revenues. Improve your customer relationships, your balance sheet position and AR KPIs, and free up team members to focus on key activities and initiatives.

Your Benefits For Attending
  • Understand why effectively managing accounts receivable is so important.
  • Learn the top ten best practices of world-class accounts receivable teams.
  • Learn about the different business risks presented by accounts receivable.
  • Learn about the types of software products that can help.
  • Learn other tips and tricks to optimize your accounts receivable process.

Instructional Delivery Method: Group Internet Based or Group Live
Recommended Field of Study: Business management & organization
Program Level: Basic
Prerequisites: None
Advance Preparation: None

  1. Introduction 
  2. Who I Am 00:01:52
  3. Agenda 00:05:42
  4. Defining A/R 00:06:06
  5. A/R Importance 00:07:57
  6. A/R Types 00:13:43
  7. A/R Accounting 00:18:53
  8. The 5 P’s of Habits 00:22:17
  9. Eliminate A/R 00:24:49
  10. Minimize A/R 00:27:41
  11. A/R Optimization ROI 00:30:46
  12. Grant Credit Carefully 00:33:02
  13. Flexible Payment Types 00:34:25
  14. Payment Type Costs 00:38:46
  15. Discounts and Late Fees 00:41:40
  16. Minimize Payment Terms 00:45:23
  17. Customer Onboarding 00:48:59
  18. Optimize Communications 00:52:47
  19. Automate Processing 00:55:02
  20. Track KPIs 00:59:09
  21. A/R KPI Calculations 01:01:08
  22. A/R Risks 01:03:15
  23. Mitigating Fraud 01:06:36
  24. Software Components 01:10:3
  25. What to Look For 01:16:15
  26. Tech Products 01:20:47
  27. Evaluation Tips 01:23:04
  28. Trends 01:27:39
  29. Tips 01:33:05
  30. Questions? 01:37:42
  31. Key Takeaways 01:39:21
  32. How We Help! 01:39:51
  33. Speaker Closing 01:41:15
  34. Presentation Closing 01: 41:47
  • Derek Henry, CPA, CFE

    Derek Henry, CPA, CFE

    Derek is an accomplished speaker, trainer, consultant, and developer with over 20 years of experience in public accounting, corporate accounting/finance, and software pre-sales. Over that time, he has taught, managed, and mentored hundreds of people on how to work with more efficiency, accountabilit [...]

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ATATX Credit

Aurora Training Advantage is offering continuing education points designed to recognize dedication to training and excellence in accounting.
  • Accounting (ACCG)00:18:55
  • Accounts Receivable (AR) 00:00:06, 00:01:18, 00:05:47, 00:06:15, 00:13:38, 00:19:31, 00:20:05, 00:41:01, 01:06:09, 01:23:09
  • Accounts Receivable Turnover (ART) 00:59:51
  • ACH Credit 00:19:06
  • ACH Debit 00:19:04
  • Artificial Intelligence (AI) 00:10:27, 00:12:31, 00:38:59, 00:53:16, 00:58:18
  • Asset 00:08:24
  • Audit 00:09:36, 00:31:46, 01:10:18
  • Average Days Delinquent (ADD) 00:59:29
  • Bad Debt to Sales (BDS) 01:00:04
  • Balance Sheet (BS) 00:19:09
  • Cash Flow (CF) 00:08:54
  • Contract 00:33:49, 00:46:34
  • Cost 00:31:05
  • Days Sales Outstanding (DSO) 00:31:13, 00:59:22
  • Income Statement 00:19:10, 00:20:19
  • Inventory 00:08:28
  • Invoice 00:10:22, 00:27:54, 00:56:38
  • Key Performance Indicator (KPI) 00:59:11
  • Percentage of Credit Available (PCA) 01:00:23
  • Reconciliation 00:56:50, 01:07:17
  • Return on investment (ROI) 00:30:48, 00:32:32
  • Revenue 00:19:08, 00:30:59
  • Revenue Recognition 00:19:23 
  • Vendor 00:33:42, 00:37:07
  • Wire Transfer 00:34:39, 00:39:08

ACH Credit : An ACH credit is a type of ACH transfer where funds are pushed into a bank account. That is, the payer (e.g. customer) triggers the funds to be sent to the payee (e.g. merchant). For example, when an individual sets up a payment through their bank or credit union to pay a bill, this would be processed as an ACH credit.

ACH Debit : An ACH debit transaction occurs when the originator of a transaction authorizes the recipient to “pull” funds from his or her account. For example, say a customer wants to pay an electric bill via ACH debit.

Accounting (ACCG): A systematic way of recording and reporting financial transactions for a business or organization.

Accounting Receivable (AR): Accounts receivable, abbreviated as AR or A/R, are legally enforceable claims for payment held by a business for goods supplied or services rendered that customers have ordered but not paid for.

Accounts Receivable Turnover (ART): Accounts receivable turnover (ART) ratio measures how often a company collects its average accounts receivable within a specific period, typically a year. It is a reflection of the company's efficacy in issuing credit and collecting debts, serving both as a marker of financial health and a predictor of cash flow.

Artificial Intelligence (AI): Artificial intelligence is intelligence demonstrated by machines, as opposed to the natural intelligence displayed by humans or animals.

Asset: Property owned by a person or company, regarded as having value and available to meet debts, commitments or legacies.

Audit: A formal examination of an organization's or individual's accounts or financial situation

Average Days Delinquent (ADD): "Average Days Delinquent" (ADD) refers to the average number of days that invoices are past due, essentially measuring how long, on average, it takes for customers to pay their overdue bills, providing a key metric for accounts receivable teams to evaluate payment delinquency across customer accounts and optimize collection processes.

Bad Debt to Sales (BDS) : The bad debt to sales ratio is the percentage of a company's sales that are lost due to unpaid invoices. It's a key metric that shows how much of a company's profit is lost to bad debt.

Balance Sheet (BS): A financial report that summarizes a company's assets (what it owns), liabilities (what it owes) and owner or shareholder equity at a given time.

Cash Flow (CF): The revenue or expense expected to be generated through business activities (sales, manufacturing, etc.) over a period of time.

Contract: A written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law.

Cost: The sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article to its existing condition and location

Days Sales Outstanding (DSO): Days sales outstanding (DSO) is a measure of the average number of days that it takes a company to collect payment for a sale. DSO is often determined on a monthly, quarterly, or annual basis. To compute DSO, divide the average accounts receivable during a given period by the total value of credit sales during the same period, and then multiply the result by the number of days in the period being measured.

Income Statement: One of the three primary financial statements used to assess a company's performance and financial position (the two others being the balance sheet and the cash flow statement). The income statement summarizes the revenues and expenses generated by the company over the entire reporting period. (investinganswers.com)

Inventory: A company's inventory typically involves goods in three stages of production: raw goods, in-progress goods, and finished goods that are ready for sale. Inventory or stock refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilization.

Invoice: An invoice, bill or tab is a commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer. Payment terms are usually stated on the invoice.

Key Performance Indicator (KPI) : A Key Performance Indicator is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs at multiple levels to evaluate their success at reaching targets.

Percentage of Credit Available (PCA): "Percentage of credit available" refers to the proportion of a company's total accounts receivable that is made up of credit sales, essentially indicating what percentage of the money owed to the company by customers is due to credit extended to them, rather than cash sales; it's calculated by dividing the total accounts receivable balance by the total credit sales and multiplying by 100.

Reconciliation: Payroll reconciliation is when you compare your payroll register with the amount you're planning to pay out to your employees to confirm those numbers match. The simplest way to think about it is double-checking your math to ensure that you pay your employees correctly. Payroll reconciliation should happen frequently.

Return on investment (ROI): A measure used to evaluate the financial performance relative to the amount of money that was invested. The ROI is calculated by dividing the net profit by the cost of the investment. The result is often expressed as a percentage. See an example here.

Revenue: In accounting, revenue is the income that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. Some companies receive revenue from interest, royalties, or other fees.

Revenue Recognition: Revenue recognition is an accounting principle that outlines the specific conditions under which revenue. In accounting, the terms "sales" and "revenue" can be, and often are, used interchangeably, to mean the same thing. Revenue does not necessarily mean cash received.

Vendor: A vendor is a person or business that supplies goods or services to a company. Another term for the vendor is the supplier. In many situations, a company presents the vendor with a purchase order stating the goods or services needed, the price, delivery date, and other terms.

Wire Transfer: Wire transfer, bank transfer or credit transfer, is a method of electronic funds transfer from one person or entity to another. A wire transfer can be made from one bank account to another bank account or through a transfer of cash at a cash office.

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Webinar Survey Overall Rating

This webinar received a total of 3 survey responses. Attendees have given an average rating of 4.7 stars out of a possible 5, reflecting the quality and value of the content presented.

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Reviews From Webinar Survey

Our webinars are crafted to deliver exceptional value and insight to business professionals. Below, you'll find genuine feedback from attendees.

Maritza D.
February 21, 2025
5.0 / 5
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Very Helpful materials
Carolyn P.
February 20, 2025
4.4 / 5
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Derek was a really good presenter. Presentation was very interesting. Looking forward to attending his next webinar.
Dara Ann D.
February 20, 2025
4.6 / 5
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Great job overall

Frequently Asked Questions

Effective accounts receivable (AR) management starts with granting credit carefully—evaluating customer creditworthiness before extending terms. World-class AR teams maintain clear invoicing processes, offer flexible payment types such as ACH, wire transfers, and credit cards, and minimize payment terms to reduce collection cycles. Automating AR processing reduces human error and speeds up cash flow. Tracking KPIs like Days Sales Outstanding (DSO), Average Days Delinquent (ADD), and Bad Debt to Sales (BDS) gives your team measurable targets. Optimizing customer communications—reminders, follow-ups, and dispute resolution workflows—reduces friction and builds relationships. Leveraging dedicated AR software further streamlines reconciliation, fraud detection, and reporting. Aurora Training Advantage's Accounts Receivable Best Practices webinar, led by CPA and CFE Derek Henry, delivers a comprehensive 100-minute roadmap to help your team reduce write-offs, shorten collection cycles, and strengthen your balance sheet.
Days Sales Outstanding (DSO) measures the average number of days a company takes to collect payment after a sale—a critical KPI for any accounts receivable team. A lower DSO indicates faster collections and healthier cash flow, while a rising DSO signals collection problems that can strain working capital and increase bad debt exposure. DSO is calculated by dividing average accounts receivable by total credit sales for a period, then multiplying by the number of days. Monitoring DSO alongside related metrics like Average Days Delinquent (ADD) and Accounts Receivable Turnover (ART) gives finance teams an accurate picture of collection effectiveness. Organizations with a high DSO often benefit from revisiting their credit policies, payment terms, and invoice automation workflows. Aurora Training Advantage's on-demand webinar on Accounts Receivable Best Practices covers DSO calculations, AR KPI benchmarks, and practical steps to improve your collection performance.
Reducing AR write-offs requires a proactive, process-driven approach from the moment credit is extended. Start by vetting customer creditworthiness carefully before approving payment terms. Clear, timely invoicing with detailed payment terms minimizes disputes. Automating payment reminders and escalation workflows ensures no overdue invoices fall through the cracks. Offering multiple payment methods—ACH credit, ACH debit, wire transfers—removes friction for customers. Tracking the Bad Debt to Sales (BDS) ratio as a KPI alerts your team to rising risk before write-offs compound. When accounts become delinquent, a structured collections communication strategy can recover payment while preserving customer relationships. Regular AR reconciliation uncovers discrepancies early. Derek Henry's Accounts Receivable Best Practices webinar on Aurora Training Advantage walks accounting professionals through all ten best practices used by top-performing AR teams to minimize write-offs and protect revenue.
The right AR software can transform a manual, error-prone collections process into a streamlined, data-driven operation. Key features to evaluate include automated invoice generation and delivery, payment portals supporting multiple payment types (ACH, credit card, wire transfer), real-time AR aging reports, and built-in KPI dashboards tracking DSO, ADD, and AR Turnover. Automated payment reminders and escalation workflows reduce staff workload and improve collection speed. Look for strong reconciliation tools that match payments to invoices accurately and flag exceptions. Fraud detection capabilities—especially important for organizations managing high transaction volumes—help mitigate financial risk. Integration with your ERP or accounting system is essential for data consistency. Aurora Training Advantage's Accounts Receivable Best Practices webinar includes a dedicated segment on evaluating AR software products, covering what to look for, available tech solutions, and evaluation tips.
Accounts receivable carries several business risks that can significantly impact cash flow and profitability. Credit risk—extending payment terms to customers who cannot pay—is a primary concern mitigated through careful credit evaluation. Fraud risk, including invoice manipulation and payment diversion schemes, requires robust internal controls and reconciliation. High Days Sales Outstanding (DSO) indicates cash flow risk, while a rising Bad Debt to Sales (BDS) ratio reflects increasing write-off exposure. Compliance risk arises when AR processes deviate from revenue recognition standards or audit requirements. Data integrity risks emerge from manual, inconsistent reconciliation. Concentration risk—over-reliance on a small number of large customers—can destabilize AR if one account becomes delinquent. Aurora Training Advantage's on-demand webinar, led by CPA/CFE Derek Henry, covers all major AR risks and practical strategies to mitigate them across your organization.