For me, accounting comes down to two major functions: control and reporting. More specifically, control of assets. You use an accounting system to control inventory, fixed assets, cash, and accounts receivable. If you’re not adequately controlling these business assets, they have a tendency to disappear.
Accounts receivable is a very dynamic asset, fluctuating from hour to hour. It is the second to last step in the Purchase >> Pay >> Order >> Cash processes, so it directly impacts available cash. Accounts receivable are more nettlesome because the real value of them is in the direct control of other people, your customers. An invoice in your accounts receivable is merely an historical business record until your customer sends payment for it.
So it makes good sense to keep your accounts receivable records in very good shape. Keep them up to date, in real time. Monitor them daily. If your customers are paying late, jump on it. An invoice can be paid today or tomorrow, but it can’t be paid last week.
Managing working capital is an effort for any business, and accounts receivable can be a large component of it. Make sure that your accounting system is working for you and alerting you to exceptions.
Dynamics GP has a tightly integrated accounts receivable system. This video shows how you can easily analyze and manage accounts receivable in Dynamics GP. Includes printing aging reports, applying documents, cash receipts, and voiding transactions.