Account Receivable Reports: Expert Tips

No one likes to be owed money, especially in businesses. For this reason, keeping up and keeping track of accounts receivables is a primary task for finance departments. Cash flow informs business decisions, so account receivable reports are often used to determine how to move forward with impending opportunities. 

We’re going to look at the various types of account receivable reports, as well as see how finance automation solutions can alleviate many burdens that your finance team is likely to be facing.

Coming Up

What is an Account Receivable Report?

When is Accounts Receivable Reported?

Which Reports are Important for Accounts Receivable?

What are Types of Account Receivable Reports?

What are the Benefits of Account Receivable Reporting?

How are Accounts Receivable Reports Used?

How to Optimize the Account Receivable Report Process?

Closing Thoughts

What is an Account Receivable Report?

An accounts receivable report is a detailed overview of a company’s accounts receivable position. 

Accounts receivable reports will showcase invoices and customer payments, as well as important details such as: amounts outstanding, invoices sent, credit levels, refunds due, and the payments received. 

Additional data is also provided, such as:

• The name of the entity providing the good/service 
• The date on which it was provided 
• The good/service that was delivered
• The recipient 
• The value of the good/service in exchange 
• The quantity provided 

Not only do these updates allow business executives to make smart decisions, but they also offer insight as to how your accounts receivables process is operating, including your collections process and credit control efficiency. 

When is Accounts Receivable Reported?

Once a good or service is delivered, the transaction gets marked in the accounting books for the business. Accounts receivable transactions tend to be recorded in a subsidiary ledger of the general ledger. 

All of these transactions get aggregated into a control account, which is a summary-level account. The reason for separating this account from the general ledger is so that you can get into more detail without overflowing the general ledger with information. 

These transactions are recorded as an asset on the debit side, and as revenue on the credit side. Once payment is received, the transaction is recorded as a debit in the cash account and a credit in the accounts receivable account. 

Which Reports are Important for Accounts Receivable?

There are endless account receivable reports at your disposal, especially if you utilize finance automation software that can easily generate these reports from you at a moment’s notice. 

That being said, these are the four main account receivable reports worth having ready to go:

1. Revenue Forecasting Reports 

A revenue forecasting report helps determine what you can expect to make during the year, as well as to understand your expected business growth and cash flow. 

2. Customer Value Reports

One of the main goals of any business is to deliver value to its customers. But, how can you measure the value you deliver? 

A customer value report determines the long-term and lifetime value of your customers by showing you the revenue by customer, average revenue per user, and the customer lifetime value. 

3. Customer Loss Reports 

No one likes to lose customers, but it’s beneficial to know if it’s happening and at what rate so that you can take measures to mitigate your losses. 

You can leverage customer loss reports to help understand how the custom experience is, the value you’re providing to your customers, and your customers’ expectations. 

4. Accounts Receivable Aging Reports 

Last but certainly not least, an accounts receivable aging report is used mainly by your collections team to deduce what invoices are overdue and how much money is outstanding.

What are Types of Account Receivable Reports?

Here are a few different accounts receivable report example options to know of so that you can pull the report you need to answer the questions you may have. 

1. Customer Reports 

Hopefully, you work with a lot of customers. Customer reports can be used to pull a customer list, which gives you full details about all your customers, along with their account, payment information, geography, salesperson, credit limits, and more. 

You can also pull revenue by customer, which is a great way to offer tailored and personalized services to your big spenders. Another type of customer report is a customer transaction report, which details the interactions you have with a specific customer in a designated time period. 

2. DSO Reports 

Days Sales Outstanding (DSO) reports is a great metric for businesses that extend credit to customers. To calculate DSO, you divide the accounts receivable by the average daily sales for the month. 

This metric shows you the average number of days that it takes to receive payment for goods sold, which helps you to better understand your cash flow and liquidity. It is also a good metric to determine the efficiency of your accounts receivable process. 

3. Customer Credit Reports

Customer credit reports display a customer’s creditworthiness and combine data from multiple credit agencies to help determine credit risk. 

4. Payment Reports 

Payment reports detail paid invoices, part payments, payment dates, open invoices, and payment methods used by each customer. 

5. Transaction Reports 

Transaction reports show you journal entries, batch listing, error reports, and other useful details about the accounts receivable duties that have been executed during any given time period. These are useful reports to audit your accounts receivable transactions. 

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As you can see from this abbreviated list, there are many different accounts receivable reports to leverage. However, if you’re compiling these reports manually, you’d be stuck wasting a lot of time and prone to countless errors due to the highly detailed nature of the data. 

Instead, businesses leverage finance automation tools to generate these reports in an instant, so that decisions can be made on the fly. Finance automation software can assist in connecting your data systems, performing swift data manipulations and calculations, and increase your data’s accuracy with minimal effort. 

What are the Benefits of Account Receivable Reporting?

If you don’t have a finger on the pulse of what you are owed, you can very much miss out on protecting your cash flow. 

Account receivable reporting is a pertinent measure to understand how your business is running, scale your operations, and better know your customers. Benefits of account receivable reporting include:

1. Enhanced Accuracy and Efficiency 

With automated account receivable reporting you can eliminate manual errors that are ubiquitous in spreadsheet-driven data and operations. Automated systems will ensure your information is always up-to-date and available for analysis. 

2. Improved Retention

By automating this data-heavy process, you can save employee time, improve your employees’ satisfaction and boost employee retention. 

3. Scale Your Business 

With proper accounts receivable management and reporting, you have more time available to grow and scale your business without less worry about getting paid on time. 

4. Better Security 

Automation software improves your data’s security and privacy inherently, which is critical when working with financial data. 

How are Accounts Receivable Reports Used?

Accounts receivable reports offer a lot of valuable insights to business stakeholders and leaders. Besides knowing the status of current invoices and what is owed, accounts receivable reports help to manage customer relationships. 

At the same time, they provide a picture of how the accounts receivables process is operating. This kind of data is valuable to have in real-time so that business stakeholders can make important decisions and manage their operations efficiently. 

Finance automation software provides this advantage. 

How to Optimize the Account Receivable Report Process?

Accounts receivable is a lot to manage, especially when performed manually. As transaction volume grows, it becomes more and more complicated to execute by hand and with spreadsheets, especially with multiple payment processors in use. 

That’s why most businesses make use of finance automation software to streamline simple and complex finance functions with utmost accuracy. To optimize your accounts receivable report process, consider:

1. Selecting Appropriate Reports 

Think about your business goals and the main key performance indicators (KPIs) you need to track to monitor your goals. Then, align the right AR reports accordingly.

2. Using Automation Tools 

Automation software has the power to dramatically transform your business for the better. Automation tools are equipped to remove key person dependencies, increase internal control, enhance data accuracy, and provide detailed insights for valuable analysis. 

Whether you use finance software to automate your reconciliation process or create your account receivable reports, easy-to-use and intuitive tools don’t require an IT team to use.

Closing Thoughts

Account receivable reports are necessary for companies to have a strong hold on how their business is faring, as well as to understand the value they are delivering to customers. In turn, these reports not only help to make crucial decisions, but they can work to improve customer relationships. 

Rather than having to sift through data from disparate sources and manually oversee accounts receivable (which is time-consuming), businesses can leverage finance automation software to automate the reporting process. 

In the same vein, you can automate the entire accounts receivable process to ensure no money owed gets left on the table and that your invoices are paid in a timely manner.