Accounts Receivable KPIs and Job Specification Overview

Title: Job Specification of Accounts Receivable

1. Bachelor's degree required; accounting, business, or economics focus is necessary.
2. Three years of accounts receivable and general accounting experience are required.
3. Knowledge of accounts receivable is essential.
4. Understanding of office administration and procedures is necessary.
5. Familiarity with general bookkeeping procedures is required.
6. Proficiency in relevant computer applications is a must.
7. Attention to detail and accuracy are crucial.
8. Problem-solving skills are necessary.
9. Decision-making skills are required.
10. Interpersonal skills are essential.
11. Good communication skills are necessary.
12. Organizational skills are crucial.
13. Stress tolerance is important.
14. Negotiation skills are required.
15. Conflict management skills are necessary.
16. Information management is essential.

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Regards

Dear friend,

Following are the KPIs on Accounts Receivable:

a) Debtor Days: Debtor days is a measure of the average time payment takes.

Formula: (trade debtors) divided by (sales) times 365

Unit type: Time

b) % of Electronic Invoices: Percentage of electronic invoices.

Interpretation: Electronic invoices are usually more efficient than invoices by mail.

Unit type: Percentage
Direction: Maximize

c) % of Bad Debts Against Invoiced Revenue: Percentage of bad debts against invoiced revenue.

Unit type: Percentage
Direction: Minimize

d) Number of Invoices Outstanding: Number of invoices outstanding in the measurement period.

Unit type: Number

e) Accounts Receivable Collection Period: This reveals how many days it takes to collect all accounts receivable. Fewer days mean the company is collecting more quickly on its accounts.

Formula: (365 Days) divided by (Accounts Receivable Turnover)

f) Accounts Receivable Turnover: This ratio shows the number of times accounts receivable are paid and re-established during the accounting period.

Interpretation: The higher the turnover, the faster the business is collecting its receivables, and the more cash the client generally has on hand.

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Regards,

Dinesh V Divekar