Faster payment of invoices ensures better cash flow and a healthier business. That is why accounts receivable management is so important. In this article, we discuss everything you need to know about accounts receivable management.

What is accounts receivable management?

We define accounts receivable management as all activities that ensure that customers pay their outstanding invoices. This starts with sending a correct invoice.

For the best results, it needs continuous attention. Preferably each day. Both by humans and software.

Update your accounting

Accounts receivable management starts with an updated and correct accounting. This sounds obvious, but it is often not the case. The processing of bank statements is lagging and invoices are sent later than necessary.

Without processing the bank statements, you don’t know whether an invoice is paid. And what action is needed.

Sending invoices with a delay, automatically leads to later payment for services and goods. In practice, delays occur due to the lack of data. This concerns, for example, information about the work performed or data required on the invoice.

Accounts receivable software

Specialized credit management software is an indispensable tool for getting the job done. Without this, you spend an unnecessary amount of time on administrative tasks. Time better spent with customers and solving problems.

Credit management software supports, among other things:

  • Monitoring payment terms.
  • Sending letters, e-mails, and text messages.
  • Payment plans.
  • Segmenting customers.
  • Dispute management.

You decide what you automate. The software is your personal assistant in day-2-day operations.

For more information, you might want to read our guide on accounts receivable software.

Illustration of a woman behind a laptop with icons associated with credit management.

Skills for the accounts receivable manager

Good software is indispensable, but the right people are just as important. The work of a credit manager touches many areas and departments. This requires a broad set of skills. We mention a few that should not be missed.


Customers often don’t pay invoices for administrative reasons. People working in accounts receivable therefore should be comfortable with the basics of accounting.


The bigger the customer, the more complex it gets. People need analytical skills for risk assessments and settling balance differences and issues.

Communication skills (verbal)

Accounts receivable managers talk a lot with customers and colleagues. Some are easy, others not. That is why accounts receivable managers must be able to deal with verbal conflicts. Wether it’s a customer, an account manager or someone at c-level.

Communication skills (written)

Email and chat apps drive written communication. A difference with verbal communication is that you can’t see how the other person reacts. Written communication therefore requires clear formulation, more than verbal communication. It concerns individual words and the structure of the text.


The accounts receivable manager depends on colleagues for its success and must therefore be a champion in collaborating.

Legal knowledge

As an accounts receivable manager, you should not be afraid of legal terms. Sooner or later, you will have to deal with a customer who refuses to pay, a bankruptcy or another conflict. You don’t have to be a lawyer, but it helps when you know the basics. For

How to set up dunning and segmentation

Setting up processes for accounts receivable starts with mapping out who your customers are. Are they consumers or businesses? What is the average invoice amount?

This information is needed for segmentation and applying the right strategy. It’s balancing between the rule and the exception. When 90% of the invoices are less than €1,000 and 2% are higher than €50,000, you want a different approach for the second category. Just like you use a different approach for consumers or businesses.

For example, a standard invoice goes through the following steps:

  • Day 1: Sending reminder.
  • Day 14: Sending reminder.
  • Day 21: Calling.
  • Day 28: Sending notice of default.
  • Day 35: Transfer to bailiff or collection agency.
Illustration of a timeline with a magnifying glass.

In our example, this probably works well for the majority of customers and invoices. But how about a € 50,000 invoice? This is where segmentation comes into play. In our example this is an exception, and you should therefore treat it that way.

How you handle exceptions differs per situation. In our case, a late payment of the invoice has a relatively high impact on the cash flow. To prevent this, you can call the customer on day 1 instead of sending a reminder. It’s even better that you call 5 days after sending the invoices, as a “service” check. That way, you avoid discovering that something is wrong when the invoice already slipped its payment term.

You create a dunning profile for each segment. This results in different profiles for key accounts, minor accounts and customers with an increased risk or those regularly miss the payment term.

Be aware not to come up with 100 segments because that misses the point.

Apple Pay and Google Pay logo

Make it easy to pay

If you want customers to pay faster, you have to make paying easy. Especially with consumers. The lower the threshold, the faster an invoice is paid.

With services like Apple Pay and PayPal, you bring the process of a payment down to a few taps. There are few resources with which you can improve payment behaviour more. You entice people to pay instead of delaying it. Because paying becomes easier than remembering it.

Payment plans

When someone pays late, chances are it is because of lack of money. In those cases, you might want to agree on a payment plan. A schedule that the customer can meet. You can push for a faster repayment, but you have to ask yourself whether it is feasible.

Just like paying in general, you also want to make it easy to comply with the payment plan. For example, send a reminder by e-mail or text message every few days before the term expires. And add the services we mentioned before.

The more current payment plans you have, the more time it takes to manage them. Accounts receivable software helps manage payment plans. That way you help the customer without it taking a lot of time.

Update your templates

As with dunning profiles, you also differentiate written communication. You send a consumer a different text than Philips. And if you have many consumers as debtors, you also segment them. You address a 25 year old who is regular late payer different from someone of 65 who pays late for the first time.

You increase the chance of success when you address people in their “own” language.

Accounts receivables and dispute management

Disputes – complaints – often serve as a reason for not paying an invoice. The causes range from an incorrect rate to a wrong shipment. But customers also used as an excuse when they can’t pay.

Accounts receivable managers are frequently the first to discover a dispute in their contact with the customer. And they have to be part of the process because it affects the payment of invoices.

The solution differs per type of dispute. This varies from a repair to sending a copy of the invoice.

The task of accounts receivable management is:

  • Register the dispute, including the reason.
  • Send the dispute to the colleague or department that will resolve it.
  • Monitoring the timely processing, including any follow-up.
  • Analysis of the causes of disputes and steering towards (process) improvement.

Fast settlement of disputes has a positive effect on cash flow. It also increases customer satisfaction because nobody likes to wait long for an answer.

Illustration of a dashboard gauge


Data only becomes useful when it’s information, and you need information so that you know what is going on. And if you know what’s going on, you can manage. As a credit manager, you therefore want to know how your accounts receivable management performs. What is the average payment term? What causes disputes? Is there a difference between payment behavior per customer group?

As a credit manager, you use reports for your daily work and for informing the organization. With every report, if you send it internally, think in advance why you are sending it. If you want a colleague to do something with the information, there must be an urgency. Therefore, don’t send reports just because it’s standard practice. There’s a good chance that people don’t act on them.

What about risk management

An important aspect that we skipped is credit risk management. We see this as a separate branch under credit management. You can read all about this in our blog about credit risk management.

Accounts receivable management with MA!N

Faster payment of invoices ensures better cash flow. And in the end, profit is only profit when the money is in the bank. That’s the task of accounts receivable management, and that’s what you achieve with our accounts receivable management software MA!N

Discover how MA!N support accounts receivable management or contact us for more information.