Are You Using These AR Best Practices?

Financial transaction processing in today's environment is a critical operation for any enterprise. No matter the size of an entity or the nature of its business, there are logical, sensible and proven practices for cash receipts. Expediting receipts processing is a facet of reducing the cost of operations. In 2001 Ernst and Young conducted a study and concluded that accounts receivable operations within the transportation sector incurred costs that ranged from two to four percent of a total invoice. Even more importantly, good AR practices improve cash flow and cash management flexibility.

While every organization must adapt best practices to its own circumstances, all can benefit from better cash receipt practices

Understanding Your DSO

The speed with which you get cash from sales into your coffers can have a tremendous impact on your company, affecting how you do business both long-term and short-term. Therefore, measuring your collection efficiency becomes an important component of any ongoing business performance analyses. One of the most common ways to measure this efficiency is by understanding your company's Days Sales Outstanding (DSO) number, also occasionally referred to as "payment collection ratio

Fraud's Impact on Accounts Receivable

Whether a fraudulent transaction is recorded as an overstatement of assets or revenue (or understatement of liability or expense), the impact of the fraud scheme will ultimately hit the bottom line of an entity's income statement as an entry to an expense account. There are several different ways that fraud may specifically affect the accounts receivable business process. First, accounts receivable may be overstated as a result of fictitious or overstated revenue. Second, accounts receivable may also be overstated as a result of skimming or larceny of payments from customers

Promissory Notes

Despite your best efforts, invoices sometimes don't get paid in a timely manner. When this happens, one option you can extend to late paying clients is the promissory note. A promissory note is a formal, legal promise that your client issues to you stating they will pay you a sum of money under specific terms. Often called a "note receivable" or even simply, a "note," a promissory note can be an effective tool for AR to get their money (possibly with interest!)

Internal Controls for Bill Processing

Internal controls for a company's billing process have as their objective the accuracy of billing data, prevention of errors or irregularities, timely processing, separation of duties, and detection of unauthorized transactions. Accuracy is critical in billing. Inaccuracy in an address means a bill gone astray; an inaccurate bill will confuse and delay payment. Errors and irregularities not only send an invoice into the customer's exception queue, they erode confidence in the supplier. When the bill is wrong, customers wonder what else is not right ...

Test Your E-Payment Armor

Do you have weak spots in your defenses against cyber payments fraud? Find out by registering for the free Cyber Attack against Payment Processes (CAPP) Exercise. It will be administered by the Financial Services-Information Sharing and Analysis Center (FS-ISAC) and will last for three days (February 9-11).
On each day of the exercise, you will receive an e-mail from FS-ISAC that describes a hypothetical attack on your organization. You will then have to answer questions about the systems and practices you have in place that are designed to thwart such an attack. Along the way, you'll learn best practice tips and recommendations on how to avoid falling prey to cyber payment schemes.

All results will be kept confidential. The deadline for registration is January 29. You can learn more and sign up at http://www.fsisac.com/capp. It's free.
Launched in 1999, FS-ISAC was established by the financial services sector in response to 1998's Presidential Directive 63. That directive--later updated by 2003's Homeland Security Presidential Directive 7--mandated that the public and private sectors share information about physical and cyber security threats and vulnerabilities.

E-Business Issues

E-business Issues

A growing number of companies use computers and the Internet in their daily business. It is therefore not surprising that e-business is an important if not significant part of their business strategy.
For more information on how you can use e-business as a part of your business strategy, please have a look at the following subsections.

E-marketplace development

Back in 1999-2000, the hype surrounding e-markets was immense and an average of 3 new e-marketplaces was being launched every day. In this section you can read more on the past and the present of e-marketplaces.

Strategic Issues

An organisation's strategic planning process for e-business needs to be firmly grounded in the whole of the business. If you are intrested in strategic planning questions and how e-business can an alternative for your company, this is the section.

Building Confidence

A key factor in increasing customer confidence is to prevent the risks of fraud and unlawful activities. There are various means of increasing the security of online financial transactions. More information is found in this section.

Legal Aspects

As soon as you are doing business online, a legal framework comes into play which must be complied with to the letter. Fortunately, this sounds worse than it really is. If you want to read more on regulations and payment issues, see this section.

E-business marketing

Online marketing is a powerful tool that gives you new possibilities, but should be used with insight.