Accounts receivable (AR) is the money that customers owe a company for goods or services purchased on credit. The accounts receivable team is responsible for collecting and managing these outstanding payments. Is being in AR a difficult and stressful job? There are several factors that contribute to whether accounts receivable is a hard job or not. Let’s take a closer look.
What Does an Accounts Receivable Job Entail?
An accounts receivable specialist is responsible for a number of critical tasks including:
– Sending invoices to customers with clear payment terms and due dates
– Recording payments when they are received and updating customer accounts
– Reconciling accounts receivable records with general ledger postings
– Following up on late and missing payments through emails, calls, and letters
– Negotiating payment plans for delinquent customers
– Recommending write-offs of uncollectible balances
– Ensuring accurate account information for credit checks and reporting
– Providing data and insights to help reduce bad debt expenses
This requires attention to detail, organization, communication skills, and the ability to balance competing priorities. Accounts receivable employees also need to be comfortable making collection calls, addressing late payments, and occasionally delivering bad news about account statuses.
Challenges and Stressors in Accounts Receivable
While no job is completely stress-free, there are some common difficulties faced by accounts receivable professionals:
Large Workloads
AR specialists are often responsible for collecting payments from hundreds of customers. Juggling high volumes of invoices, credits, payments, and aging balances is challenging. Periods like month-end or quarter-end close can be exceptionally hectic.
Meeting Deadlines
Accounts receivable teams have pressing deadlines for tasks like sending invoices, recording receipts, and reporting metrics. Missing deadlines could negatively impact cash flow or compliance. AR employees have to balance meticulousness with speed.
Unpleasant Interactions
Having to constantly follow up on late or missing payments can lead to tense conversations and interactions. Irate customers and difficulty collecting can create stress and frustration. AR requires tactfully asserting the company’s needs.
Uncertainty
There are often external factors impacting collections that are outside of the control of AR staff. Economic conditions, customer retention, disputes, and other issues can all affect accounts receivable work. This uncertainty can be worrying.
Monotony
While there are challenging elements of AR, much of the day-to-day work involves routine tasks like payment posting, reporting, and inbox management. Periods with few escalated issues can feel dull.
Small Errors, Big Impacts
Even small data entry mistakes or overlooking details can lead to problems like incorrect customer statements, accounting misalignments, and reporting errors. AR workers have to be extremely detail-oriented.
Factors That Can Make Accounts Receivable More Difficult
Certain scenarios tend to increase the stress levels and workload involved in accounts receivable:
– Working in an industry with higher late payment rates or bad debt
– Being short-staffed in the AR department
– Using outdated or inefficient collections technology
– Having unclear policies, metrics, and targets from leadership
– Handling AR across global operations and different time zones
– Working during periods of economic uncertainty or recession
– Managing complex B2B credit arrangements and terms
– Interacting with angry, difficult, or dishonest customers
Factors That Can Make Accounts Receivable Easier
On the other hand, there are situations that can streamline AR operations:
– Having recurring revenue or subscription-based business models
– Maintaining accurate customer contact information
– Using billing and collections software to automate tasks
– Offering digital payment options to improve collections
– Establishing and enforcing clear credit policies
– Building strong relationships with customers
– Offering discounts or incentives for early payment
– Having collaborative teams and clear processes
– Providing adequate AR staffing and resources
– Operating in a growth industry with loyal customer bases
Key Skills Needed to Thrive in Accounts Receivable
Certain skills and traits can help accounts receivable pros tackle the challenges of the job and be successful:
– Organization – Juggling high volumes requires structured systems and orderliness
– Communication – Clear emails, calls and documentation are essential
– Multi-tasking – Being able to quickly switch between different priorities is vital
– Analytical skills – Reviewing reports and data to spot patterns and issues is important
– Collaboration – Accounts receivable works cross-functionally with sales, accounting, etc.
– Tact and professionalism – Maintaining composure and diplomacy helps collections
– Tech-savviness – Using billing and collections tools streamlines work
– Resilience – Coping with rejection and setbacks without taking it personally
– Diligence – Persistence and following up is key to resolving late and disputed payments
Tips for Managing Stress and Avoiding Burnout
Heavy workloads, long hours, and difficult interactions can lead to stress and burnout for accounts receivable professionals. Here are some tips to maintain resilience and engagement:
– Take regular breaks to recharge – especially after a tense call
– Set boundaries on work hours when possible
– Don’t take delays or disputes personally – it’s just business
– Maintain proper work-life balance and use vacation time
– Build rapport and camaraderie among the AR team
– Celebrate collection wins and milestones to stay motivated
– Develop some thick skin when interacting with upset customers
– Try not to catastrophize if payments hit snags – solve issues calmly
– Keep your desk and computer organized to avoid workflow chaos
– Use humor and laughter to put situations in perspective
– Practice mindfulness, meditation, or deep breathing when stressed
– Maintain a sense of pride in the vital role you play for the company
Closing Thoughts – Is Accounts Receivable Worth It?
So in summary – is accounts receivable a difficult job? The answer is it certainly can be. AR professionals take on important responsibilities that involve tedious tasks, time pressures, and challenging interactions. However, the right skills, support resources, and healthy mindset can help accounts receivable specialists thrive and have fulfilling careers. Accounts receivable plays a vital operational role by keeping cash flowing and providing insights into customer health. For those who enjoy methodical work, problem-solving, and measurable accomplishments – accounts receivable can be a rewarding career choice. With the right expectations and coping techniques, accounts receivable professionals can excel and make a difference despite the inherent challenges of the role.