8 key accounts receivable reports your business should track

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    8 key accounts receivable reports your business should track

    The business world is going through rapid changes, and to keep pace with that, organisations must possess the right tools. For businesses to remain competitive in this digital economy, companies need to make strategic decisions based on data. One of the most important tools for decision-making is accounts receivable (AR) reports, as they provide critical insight into a company’s financial standing, customers, and performance trends.

    Simply put, an account receivable report is the lifeblood of your business operations. To calculate your business' profitability and clearly understand your income, you need to track your accounts receivable regularly.

    To generate an AR report, you need to collect and analyse the data from customer invoices, payments, and the flow of cash within a company. With that said, here are 8 key accounts receivable reports businesses should track:

    1. Accounts Receivable Ageing Reports

    Accounts receivable ageing report is primarily used by collections personnel to determine which invoices need to be paid as soon as possible. This report also provides insight into which customers are having difficulty paying their dues, thus giving you a chance to intervene and offer different payment options.

    In this report, a business needs to rethink its collection strategy if a large collection is overdue. It also allows businesses to identify customers who are consistently late in payments and take appropriate action to ensure that they pay on time. The organisation needs to relook at its credit control policy to mitigate risks and improve its collection strategies to achieve optimal cash flow.

    2. Payment Reports

    Payment reports provide an overview of the payments received by a company. This report includes the following information:

    • The date and amount of payment received
    • The customer name or account number associated with the payment
    • The payment method (credit card, ACH transfer, etc.)
    • The invoice number
    • Any fees charged for processing the payment 

    Payment reports are essential for tracking customer payments and keeping accurate records. By monitoring this report, businesses can stay on top of customer payments and maximise their accounts receivable management.

    3. Receivables by Customer Reports

    This report helps identify the customers and their amounts due. It provides complete details of each customer, including their credit limit, salesperson associated with the account, currency preferences, discounts, geography, payment information, and history. The Receivables by Customer Report gives a business insight into how much it needs to collect from different customers. With this report, organisations can quickly assess which customer accounts are delinquent and which customers are making timely payments.

    This report helps identify customer credit risk and anticipate potential bad debts. It allows businesses to apply discounts or incentives to certain customers who pay promptly. This report also segments customers by the amount of revenue they generate for your company. This helps you to understand customers’ buying behaviour and plan sales strategies accordingly.

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    4. Cashflow Forecasting Reports

    Cashflow forecasting reports provide insight into a company’s cash balance, future cash needs, and potential sources of liquidity. This report helps businesses identify when additional funds may be needed to meet short-term expenses, as well as plan for long-term investments.

    This report is essential for any business in order to make informed decisions about how much money it needs to keep on hand and when it should invest in additional inventory or equipment. With this report, companies can also analyse whether their accounts receivable collection policies are effective and if they need to be adjusted or changed.

    5. Aged Trial Balance

    An aged trial balance report provides a detailed list of all accounts receivable, including the customer’s name, invoice number, date of invoice, amount due, and payment status. This report can be used to track customer payments and determine which invoices are outstanding in order to prioritise payment collection efforts.

    It is important for businesses to regularly review this report in order to ensure that all payments are received on time and are accurate. This report can also be used to identify any discrepancies or errors in customer invoices, which can help the company avoid potential disputes. In detail, an ageing detail report shows the following information for each customer's transaction:

    • It shows the customer's legal name
    • The type of customer transaction, including invoice, statement charge, or customer credit
    • The date on which the transaction was entered into the system
    • The number of transaction
    • Payment due date
    • The number of days past due
    • Lastly, the amount due


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    6. Customer Loss Reports

    Customer loss reports provide an overview of customers who have stopped doing business with a company. This report allows the business to identify any customer churn and make adjustments to retain its current customers.

    For example, this report helps businesses understand why certain customers are no longer making purchases or availing services from them. The information provided in this report can also be used to assess the effectiveness of marketing campaigns and adjust strategies accordingly.

    These reports can provide useful insights into customer buying behaviour and preferences, allowing the business to tailor its products or services more effectively. Furthermore, this report helps businesses avoid costly mistakes by providing them with valuable data on their customers’ experiences.


    7. Customer Credit Reports

    Credit reports provide an overview of a customer's creditworthiness. This report includes information on the customer's payment history, debt limits, and current financial status. Credit reports generated by accounts receivable automation solutions such as HighRadius combine data from multiple credit agencies such as Experian, TransUnion, and Equifax.

    This report helps businesses determine the risk of extending credit to customers, calculate payment terms and discounts, and monitor customer payments for accuracy. Credit reports also help businesses to identify customers that may be at higher risk for non-payment or defaulting on debt.

    Companies can also use this report to set appropriate credit limits based on each customer’s financial situation. This helps businesses manage their accounts receivable and potential bad debts more effectively.


    8. Revenue by Customer Reports

    Revenue by customer reports provides an overview of a company’s total sales revenue broken down by customers. This report can be used to identify customers who are the most profitable and those that are at risk for non-payment or defaulting on payments.

    This report also helps businesses track customer purchasing trends, enabling them to better understand their customer base and target customers more effectively. In detail, this report shows the following information:

    • The total amount of sales revenue generated by each customer
    • The date on which each sale was made
    • The type of product/service purchased by a customer
    • The payment terms and discounts offered to customers.

    By regularly monitoring this report, businesses can identify opportunities to improve customer loyalty and profitability. This helps businesses maximise their accounts receivable management and increase overall sales revenue.


    Importance of automating your accounts receivables process for reporting purposes

    Businesses use accounts receivable reports to monitor their customers' payment activities. These reports give businesses a better understanding of their customer's payment patterns and help them manage cash flow more effectively. By automating your accounts receivable process you’re also able to automate and streamline your accounts receivable reporting as well. Below are the benefits of automating your accounts receivable process for reporting purposes. 

    Improved accuracy and efficiency

    It helps to ensure accuracy by eliminating manual entry errors that can occur when manually entering data into spreadsheets or other systems. The automated system allows for more accurate and up-to-date data, which is critical for making informed decisions. It eliminates the need for manual entry, which can be time-consuming and difficult to manage. The reports are created quickly, eliminating the need for manual calculations or data analysis.

    Improved security

    Automating your account receivable process helps to ensure data security and privacy as the data is securely stored away from unauthorised access. This protects customer information from being accessed by anyone other than authorised personnel, ensuring that customer information remains secure.

    Helps with employee retention

    Automating a business's accounts receivable process and getting reports from the software helps to ensure that employees are spending less time on manual data entry tasks, freeing up their time for more important activities. This can help reduce employee turnover and improve overall employee retention.

    Forget the old ways of doing things

    Manual systems can negatively impact your business’s productivity, cash flow, accuracy, and security. Automating the accounts receivable process helps businesses save time and money while ensuring accurate and timely data is available for decision-making. This allows businesses to focus on more important tasks and initiatives that will help them grow and succeed.

    Grow Your Business Using Accounts Receivable Reports

    In conclusion, understanding the different types of accounts receivable reports is critical for effective accounts receivable management. By monitoring these reports on a regular basis, businesses can ensure that they are maximising their sales revenue while keeping their customers satisfied. With the right accounts receivable management strategy in place, businesses can maximise their profitability and customer loyalty.


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