Accounts Receivable Basics
This document is issued to a customer to request payment for goods or services rendered.
What is an invoice?
This term describes a discount offered to customers for paying their invoices early.
What are prompt payment incentives? (PPI)
This internal team is responsible for validating customer complaints and disputes.
What is the resolution owner?
The first reminder sent to customers after an invoice becomes overdue is commonly called this.
What is a dunning level 1?
This policy outlines when invoices should be paid and what happens when they are overdue.
What is a payment terms policy?
This AR term refers to the total money owed to a company by its customers.
What are accounts receivable?
When an invoice is incorrect, this type of document is issued to adjust the amount owed.
What is a credit memo?
This type of dispute occurs when customers believe they were billed for products they never received.
What is an incorrect quantity dispute?
This approach involves contacting customers by phone to collect payment on overdue invoices.
What is a collection call?
This limit determines how much credit a customer may use at one time.
What is a credit limit?
This report groups outstanding receivables by the length of time they’ve been unpaid.
What is an aging report?
This is the most common reason customers claim they never received an invoice copy.
What is an invoice output issue?
When a customer claims pricing is incorrect due to contract terms, they are often requesting this type of correction.
What is a pricing adjustment?
What is an invoice correction?
This type of collection activity involves contacting the customer before their invoice is due.
What is proactive collections?
Employees handling customer financial data must comply with these types of safety and confidentiality rules.
What are data privacy or security policies?
This accounting method recognizes revenue when it's earned, not when cash is received.
What is accrual accounting?
This is when material is shipped but the funds are not posted to accounts receivables.
What is a shipped not billed issue?
What is an accounting document error?
When a credit is applied internally towards an invoice, but the customer also uses the credit.
What is a duplicate deduction?
This document shows all open invoices and credits to help both parties align on account status.
What is a customer statement?
or
What is a statement of account?
This company is used to assess creditworthiness before extending credit.
What is Dun and Bradstreet?
This AR metric measures how quickly a company collects cash from customers and is often expressed as a ratio.
What is Days Sales Outstanding (DSO)?
This term refers to posting a payment/credit against an invoice/debit.
What is reconciliation?
This is where you can locate the origin of the dispute in SAP.
What is the disputed objects folder?
What is a clearing document?
If internal collection efforts fail, the funds may be written off.
What is bad debit?
This financial law requires accurate recordkeeping and transparency in company financials.
What is Sarbanes–Oxley (SOX)?