Why Accounts Receivable Certifications are Required

The Need for Accounts Receivable Certifications

The increasingly competitive nature of the business world, requires that people performing important functions within an enterprise should be appropriately qualified to perform that functIon to the best of their ability. It is no longer sufficient to rely on a very general business qualification to equip staff to perform specialiZed functions, but instead there are accounts receivable qualifications available through which staff may gain the expertise in a specialist area, that demonstrates to the enterprise that they are equipped to perform the function.

Some of the most important functions within an enterprise, are those concerned with maintaining liquidity and ensuring that the business is exploiting every opportunity to maximize its ability to function as a going concern, without being constrained by lack of funds, or the need to borrow short term at higher rates than its competitors. Dealing with accounts receivable is a function that can increase the liquidity of the enterprise, if it is performed efficiently, and if the correct policies are introduced within the relevant department. It is therefore essential for every enterprise to be aware of the existence of accounts receivable certifications for members of staff and for departments, by means of which the enterprise can be sure that the maximum possible expertise is being brought to bear on the problems arising from accounts receivable.

Functions Relating to Accounts Receivable

Dealing with accounts receivable involves a number of specialist functions, including order processing, credit control, billing and debt collection. The establishment of appropriate internal controls for accounts receivable can reduce error and fraud. To perform these functions, staff need to have a detailed knowledge of the relevant law, accounting treatment and internal procedures. These functions also require skill in dealing with the people and organizations who are customers of the enterprise, and the ability to balance the enterprise’s needs with the requirements of the customers.

An organization needs to be careful about the type of customers it retains, and should extend credit only to those who have a good credit history. Invoicing has to be accurate, to avoid delays and legal problems. Collection procedures are very important, and involve ensuring that customers are aware of the time they are being given to pay ,and of any discounts for early payment, in addition to interest that will be charged in the event of late payment. Dealing with the cash receipts appropriately, and ensuring that the correct accounting entries are made, is essential to avoid confusion, errors and potential bad debts at a later date.

Specialist Certification for Accounts Receivable.

Certification as an accounts receivable specialist, is generally open to people already working with accounts receivable, taking into account their qualifications and practical experience. The examination involves testing the candidate in the main areas of the accounts receivable function, including order processing, credit management, billing, cash receipt, internal controls and accounting records. A certification as an accounts receivable manager involves examination in the same functions as the specialist qualification, but additionally there is a part of the examination dedicated in particular to the management function.

An additional possibility is for an enterprise to obtain an accounts receivable certification for a whole department. This involves ensuring that a certain percentage of the staff working in the accounts receivable department have obtained the accounts receivable certification, and gives assurance to the management of an enterprise, that the department handling accounts receivable has acquired the relevant specialist knowledge to carry out the functions of the department to a high standard.

The Benefits of Accounts Receivable Certifications

An enterprise that is able to quickly turn its debtors into cash, is less likely to develop liquidity problems. The rapid collection of debts means that the funds will be available to pay the enterprise’s own trade creditors as these payments come due. The efficient management of accounts receivable may help to reduce the incidence of bad business debts, and enable the enterprise to develop a firmer relationship with its customers. It is therefore in the interests of any enterprise to encourage its staff to obtain an accounts receivable certification, and to follow through with a program to ensure that the whole accounts receivable department obtains a qualification.

Staff members and departments who have received accounts receivable certifications are likely to take a greater interest in keeping their knowledge up to date, and this is possible through continuing professional development courses that are offered by the organizations responsible for certification. This ensures that the accounts receivable staff continue to take a professional approach to their work as their experience grows.

References

“Accounts receivable certification” on the Accounts Receivable Network, https://www.thearnetwork.com/accounts_receivable/modules.php?name=Articles&new_topic=127

“Accounts receivable certification” on IARP, https://www.theiarp.org/ViewItem-173.do;jsessionid=4D6D767A2C97FF139687E80EBBDC31DF?parentCatId=169

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