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Accounts Receivable (AR) in NetSuite is a module that helps businesses manage customer invoicing, payments, and collections. It is a critical component of NetSuite’s financial management suite, ensuring efficient tracking of revenue and outstanding payments from customers.
The AR process involves:
Recording sales and issuing invoices to customers.
Tracking payments received.
Monitoring outstanding balances.
Managing credit terms and collections.
NetSuite provides tools to streamline these tasks, automate recurring processes, and improve cash flow visibility.
Customer Management
Create and manage customer records under Lists > Relationships > Customers > New.
Assign credit limits, payment terms, and default currency for each customer.
Track customer-specific pricing and sales history.
Invoice Management
Create sales invoices for products or services under Transactions > Sales > Create Invoices.
Automate invoice creation from sales orders or recurring transactions.
Customize invoice templates with company branding.
Payment Processing
Record customer payments under Transactions > Sales > Accept Customer Payments.
Apply payments to open invoices.
Support multiple payment methods, including checks, credit cards, ACH, and wire transfers.
Process refunds when necessary.
Collections Management
Generate and send payment reminders for overdue invoices.
Track aging receivables with detailed aging reports.
Implement approval workflows for managing credit holds on overdue accounts.
Multi-Currency Support
Manage AR in multiple currencies, with automatic currency conversion if NetSuite’s multi-currency feature is enabled.
Revenue Recognition
Integrate with NetSuite’s Advanced Revenue Management module to handle deferred revenue and compliance with accounting standards like ASC 606.
The AR workflow typically follows these steps:
Create a Sales Transaction:
Generate an invoice or sales order to record the sale of goods or services.
Record Customer Payment:
Navigate to Transactions > Sales > Accept Customer Payments to apply payments to invoices.
Reconcile Payments:
Match payments with bank statements during reconciliation.
Monitor Aging Receivables:
Run AR Aging Reports to identify overdue balances and follow up with customers.
Collections and Write-Offs:
Manage collections efforts for overdue invoices.
Write off bad debts as necessary under Transactions > Customers > Write Off Invoices.
NetSuite offers various pre-configured reports to track AR performance:
Accounts Receivable Aging Report: Displays overdue invoices by age category.
Customer Balances: Lists outstanding balances for each customer.
Invoice Register: Summarizes issued invoices.
Cash Flow Forecast: Includes expected AR payments in cash flow projections.
Automation: Reduce manual errors by automating invoice creation, payment reminders, and recurring transactions.
Visibility: Get real-time insights into customer balances, overdue payments, and cash flow.
Efficiency: Integrate AR with other NetSuite modules like order management and billing for streamlined operations.
Global Capabilities: Manage AR in multiple currencies and subsidiaries with NetSuite OneWorld.
Set Clear Payment Terms: Define and communicate payment terms during customer setup.
Monitor Aging Reports Regularly: Use AR Aging Reports to proactively manage overdue accounts.
Automate Collections: Leverage NetSuite’s email reminders to prompt customers for payments.
Reconcile Payments Promptly: Regularly match received payments to open invoices to ensure accurate records.