Accounts Receivable Acronyms for Reference

Whether you’re new to accounts receivable (AR) and collections or a bit more seasoned, it’s a good idea to brush up on some of the more commonly used acronyms. How many of these do you already know? Are there others your peers should know about? If so, leave us a comment below and we’ll add your suggestions to this list.

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5 Payment Strategies for Optimizing Cash Flow

It is important for enterprise business owners to evaluate their account receivables (AR) management strategies, especially when operating with margin constraints. Your business may be growing and you must strategically sacrifice margins, or you may be in an industry with narrow margins in the first place. Sageworks research shows that certain industries even generate negative margins, with software publishers at -5%, beverage manufacturers at -3.7%, and manufacturers of semiconductors and other electronic component at -0.3%.  Regardless of your industry, following the five payment strategies below will ensure the positive cash flow that will feed the success of your business.

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What is Best Possible DSO?

While Standard DSO measures current and overdue invoices, Best Possible Days Sales Outstanding (or Best DSO) measures only current invoices. Tracking the delta between Best DSO and Standard DSO will ensure that you are optimizing your business’ account receivable (AR) management practices and help identify opportunities to improve cash flow. Quarter-over-quarter or year-over-year reductions in this delta is a key performance indicator (KPI) of AR improvement - and the financial health of your company.  

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Account Receivables Metrics as Customer Success Indicators

As a supplier, staying proactive with accounts receivable (AR) collections is not only good business practice, but is also good customer relationship management. How can your AR process foster better client relationships?

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What is an Average Receivables Collection Period?

Sales is the #1 financial statement that gets the most attention, closely followed by net income. Even if the figures on paper are impressive, they don’t necessarily represent cash on hand if you operate on an accrual basis. Instead, these numbers often reflect potential revenue and net income from cash flow that hasn’t occurred—assuming you'll be paid.

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Average Days Sales Outstanding: How High Is Too High?

It feels great to make a sale and send an invoice out.

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