An overview of what to look for when choosing an accounts receivable representative
Hiring an AR Representative: What You Need to Know
The role of an accounts receivable employee is becoming increasingly important as businesses grow and financial transactions become more complex. This role ensures businesses can efficiently manage and collect unpaid invoices and bills to maintain a healthy cash flow.
Responsibilities of AR RepresentativeThe role of an accounts receivable representative
Billing and Invoicing
Maintain an accurate billing system
Generate and send out invoices and account statements to clients
Payment and Collections
Negotiate payment arrangements and plans with delinquent clients
Record and reconcile payments in the accounting system
Account Management
Resolve payment discrepancies and disputes
Maintain up-to-date billing accounts and records
Calculate billing amounts based on various rate plans and promotional offers.
Reporting and Documentation
Produce weekly, monthly, and yearly reports as required by management
Remind customers of upcoming payments and notify them of past-due accounts
Make electronic or cash deposits to company bank accounts
Bookkeeping and Financial Records
Maintain comprehensive bookkeeping databases and spreadsheets
Perform account reconciliations periodically
Maintain well-organized accounts receivable files and records
Financial Analysis
Produce monthly financial and management reports
Assist in general financial management and analysis of the company’s standing
Debt Collection
Send overdue accounts to your debt collection agency, such as Fair Capital, for specialized handling
Qualifications
Job requirements for an accounts receivables representative
Educational Background: A bachelor's degree in finance, accounting, or a related field is typically required.
Experience: Minimum of 2-3 years in accounts receivables or a similar financial role. Familiarity with invoicing, financial software, and credit control is essential.
Certifications: While not mandatory, certifications like the Accounts Receivable Specialist (ARS) can be an advantage.
What to look for in an accounts receivables candidate
Attention to Detail: They must meticulously review financial documents and spot discrepancies.
Communication Skills: Efficiently communicate with customers regarding overdue payments.
Analytical Skills: Analyze financial data to determine creditworthiness and strategize collection efforts.
Time Management: Prioritize tasks to ensure timely collections and reporting.
Negotiation Skills: Skillfully negotiate payment plans or settlements.
Interviewing accounts receivable candidates
Technical Knowledge: Ask questions related to the accounts receivable process to measure their understanding of credit policies, invoicing, and collections.
Scenario-Based Questions: Use hypothetical situations to evaluate their problem-solving and negotiation skills.
Behavioral Questions: These can help assess their ability to work in a team, adapt to challenges, and maintain professionalism under stress.
Software Skills: Check if the candidate is familiar with the accounting software your company uses.
References: Contact previous employers to evaluate their reliability, work ethics, and technical skills.
Where to find the right accounts receivable candidates
Online Job Portals: Websites like LinkedIn, Indeed, and Glassdoor often have listings for accounts receivable positions.
Accounting and Finance Job Fairs: These can be great places to find specialized talent.
Referrals: Ask your current employees if they know any qualified individuals.
The importance of hiring a qualified individual
Financial Health: Efficient collection of accounts receivables ensures a stable cash flow.
Customer Relations: A skilled representative can handle delicate financial conversations without harming business relationships.
Risk Mitigation: Reduces the chances of bad debt and financial losses.
Operational Efficiency: Enables the finance department to function smoothly, ensuring other departments aren’t affected by cash flow issues.
While a competent accounts receivables representative can handle most collections, there are situations where outsourcing to a specialized debt collection agency, like Fair Capital, might be more beneficial.
Extremely Overdue Accounts: If an account is overdue for several months and in-house efforts have failed, it might be time to seek external help.
Challenging Customers: Some clients might be especially difficult to deal with or have a history of defaulting.
Legal Implications: Debt collection agencies are well-versed with the legal parameters of debt collection, ensuring that all actions taken are within legal bounds.
Focus on Core Activities: Outsourcing can allow your business to concentrate on its primary activities rather than getting bogged down by collection efforts.
In conclusion, hiring the right accounts receivables representative is pivotal for a business's financial health. It ensures that outstanding payments are timely collected, maintains amicable business relationships, and upholds the company's financial reputation. However, recognizing when to bring in external expertise, like a debt collection agency, is equally crucial for addressing particularly challenging accounts.
