Accounts Receivable Routine: Steps, Challenges, and How to Gain Efficiency

The accounts receivable routine is directly linked to the company's liquidity and working capital. It is responsible for the inflow of resources that keep operations running and enable new investments. Even so, many financial teams face challenges such as manual controls, lack of standardization, and difficulty in monitoring default rates.

More than an administrative task, accounts receivable is a strategic process. When well-structured and supported by automation, it offers cash flow predictability, reduces risks, and strengthens the CFO's role as a growth agent.

In this article, we explore how the accounts receivable routine works, its main challenges, and practical ways to make it more efficient.

What is Accounts Receivable?

Accounts receivable is the set of processes responsible for recording, monitoring, and guaranteeing the receipt of amounts owed to the company by customers, resulting from the sale of products or the provision of services. In other words, it is the control of financial inflows that sustain working capital and allow the operation to continue functioning.

In practice, accounts receivable involves steps such as issuing invoices, sending bills, monitoring payment deadlines, recording receipts, and collecting from defaulters. When well-structured, it offers predictability about available resources and reduces the risk of failures in cash flow.

Why Accounts Receivable is So Important

More than an administrative process, accounts receivable is a strategic pillar of financial health. It directly influences liquidity, the ability to honor commitments, and even the company's image in the market.

Some of the main impacts include:

• Healthy Cash Flow: Payments received on time avoid the need to resort to expensive credit to cover expenses.
• Reduced Default Rates: Constant monitoring allows for quick action in case of delays.
• More Accurate Financial Planning: Predictability of inflows facilitates investment and expansion projections.
• Customer Relationship: An organized collection management conveys professionalism and strengthens commercial trust.

In short, accounts receivable is not just a control of amounts to be received: it is the guarantee that the company will have financial strength to sustain its operations and invest in growth.

What are the Main Steps in the Accounts Receivable Routine?

The accounts receivable routine consists of a set of activities that ensure that the amounts owed to the company are recorded, monitored, and received within the correct deadline. Each step is essential to maintain cash flow predictability and reduce default risks.

Issuing Invoices and Bills

The process starts with the correct issuance of invoices and bills, documents that formalize the payment obligation by the customer. Any error in this step can delay the entire receiving cycle.

Registering Accounts in the System

After issuance, each invoice must be registered in the management system or ERP. This registration centralizes information and gives the financial team visibility on the amounts to be received and their respective due dates.

Defining Payment Terms and Conditions

It is essential that payment terms, discounts, and any interest for late payment are clear and aligned with the customer. This step reduces future conflicts and strengthens the commercial relationship.

Monitoring Receipts

As customers make payments, the finance department needs to track and check if the amounts have been received correctly. This step involves bank reconciliation, which compares what was recorded in the system with the bank account statement.

Collecting from Defaulters

When there is a delay, it is the role of accounts receivable to contact the customer in an organized and professional manner. This collection can happen through automatic reminders, emails, or even direct negotiations, always with the objective of recovering the credit without damaging the relationship.

Reports and Performance Indicators

Finally, consolidating information into reports allows the CFO to track indicators such as default rate, average collection period, and aging list. This data is fundamental to support strategic decisions.

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The accounts receivable routine goes far beyond “waiting for the payment to arrive”. It requires organization, rigorous controls, and clear communication to ensure that resources enter the company's cash flow at the right time.

What are the Challenges of Manual Accounts Receivable

When accounts receivable is managed manually (in spreadsheets, emails, or decentralized records), risks and inefficiencies accumulate. The result is wasted time, increased default rates, and less predictability about cash flow.

Registration Errors and Discrepancies

Manual data entry increases the chances of errors: a swapped number or an incorrectly registered due date can cause delays and compromise financial control.

• Duplicate entries.
• Discrepancy between invoices issued and payments recorded.
• Constant need for verification.

Delays in Collection

When there are no automatic reminders, the team needs to control due dates manually. This means collections are sent too late, reducing the chances of quick recovery.

• Overdue payments go unnoticed.
• Customers are only contacted after several days of default.
• Greater risk of revenue loss.

Lack of Standardization

Each employee can use a different spreadsheet format or collection method. This lack of consistency generates rework and reduces the credibility of the process.

• Information scattered in multiple files.
• Difficulty consolidating data into reports.
• Loss of history about negotiations with customers.

Low Visibility for Financial Planning

Without real-time updated reports, the CFO cannot accurately predict future cash flow. This hinders investment decisions and increases dependence on expensive credit.

• Delayed or incomplete reports.
• Absence of indicators such as aging list or average collection period.
• Decisions based on outdated data.

How to Increase Efficiency in the Accounts Receivable Routine

Efficiency in accounts receivable does not depend on a single factor. It is the result of the combination of clear processes, real-time information, and technology that eliminates rework. See four practical ways to achieve this result:

1. Structure Clear Rules and Policies

An efficient accounts receivable starts with well-defined credit and collection policies. When terms, conditions, and criteria are transparent, the risk of conflicts and delays decreases.

2. Monitor Indicators that Matter

More than recording entries, it is necessary to measure the quality of the process. KPIs such as Days Sales Outstanding (DSO), default rate, and aging list show where the bottlenecks are.

3. Be Proactive in Communication with Customers

Many delays do not happen due to lack of resources, but due to forgetfulness or communication failures. Reminders before the due date and an organized history of interactions make a difference.

• Automatic due date notices.
• Single channel to handle collections.
• Centralized record of contacts.

4. Invest in Gradual Automation

Automating is not replacing people, but eliminating manual tasks that consume time. Start with critical points such as invoice issuance, sending alerts, and bank reconciliation. This frees the team for strategic analysis and projections.

Is it Worth Automating Accounts Receivable?

Yes: the gains go far beyond “doing it faster”. Automating accounts receivable means reducing errors, gaining predictability, and freeing the financial team to act more strategically.

See the difference in practice:

Before (manual process)	After (with automation)
Manual invoice issuance, subject to errors.	Automatic and standardized issuance of invoices and payment slips.
Decentralized spreadsheets and duplicate records.	Centralized and reliable data, integrated with the ERP.
Collections sent late or forgotten.	Automatic due date alerts sent to customers.
Time-consuming bank reconciliation subject to discrepancies.	Real-time reconciliation between system and bank statement.
Outdated reports and little visibility.	Indicators updated instantly (DSO, default rate, aging list).

Automation brings direct benefits to CFOs and financial teams:

• More Cash Flow Predictability: With real-time reports, it is possible to plan investments more safely.
• Less Risk of Default: Automatic reminders and active monitoring reduce delays.
• Operational Efficiency: Repetitive tasks no longer take up hours of the team's time.
• Greater Control and Compliance: Digital audit trails ensure transparency in all stages.

How to Start Automating Accounts Receivable in Practice

Automating does not mean changing everything at once. The safest way is to start small, test, and expand gradually. This reduces risks and increases team acceptance.

1. Identify the Most Critical Point

Observe which steps of accounts receivable consume more time or generate more errors. It could be manual invoice issuance, sending collections, or bank reconciliation. This will be the best starting point.

2. Choose an Accessible Solution

No-code automation tools allow the financial team itself to configure flows without depending on IT. This speeds up the process and gives autonomy for quick adjustments.

3. Run a Quick Pilot

Instead of automating everything, choose a simple flow to start.

Example: Configure the automatic sending of due date reminders by email to all customers with open invoices.

Expected result: Fewer oversights, reduction in default rates, and less time spent by the team collecting manually.

4. Evaluate and Expand

After the pilot, track indicators such as default rate and Days Sales Outstanding (DSO). If the gains are clear, move to other steps, such as automatic invoice issuance and reconciliation with the bank.

Conclusion

Accounts receivable is one of the pillars of the financial health of any company. When well-structured, it guarantees cash flow predictability, reduces default risks, and strengthens growth. Automation enhances these results by eliminating manual tasks, increasing control, and freeing the financial team for more strategic analyses.

The future of accounts receivable is digital, agile, and reliable, and starting this transformation can be simpler than it seems.