Accounts receivable software automates the process of invoicing and payment receipt, including electronic invoice receipt, multi-bill packages, and electronic check and payment posting. It can also eliminate manual tasks like check writing and account balancing, and offer customizable options for managing vendors and accounts.
Accounts receivable is an accounting activity that involves receipt of invoices and payment of invoices. Accounts receivable software applications are automated tools that allow a business to use computer technology to eliminate some manual actions from this process. Different types of applications include electronic invoice receipt, multi-bill packages for many vendors, and electronic check and payment posting to finalize vendor accounts. In most cases, accounts receivable software applications are all-inclusive, which means that one software package handles all of these tasks. Modular software packages allow companies to add just one accounts receivable module to existing software to complete these functions.
Invoices are usually a document that validates a transaction, such as the purchase of goods or services. Instead of receiving paper invoices in the mail, accounts receivable software applications can enable the electronic transfer and receipt of such documents. For example, downloading a file from a vendor’s website directly into accounts receivable software allows people to review documents and balance accounts through the software package. Electronic returns can also work in a similar way, that is, downloadable from a website. This saves paper and prevents the loss of crucial accounting documents.
Few companies have a few vendors or suppliers from whom they purchase goods and services. Therefore, accounts receivable software applications have features that allow for multiple vendor numbers and accounts. Multiple accounts receivable may also be necessary to group vendors by type or goods or services offered. Accounts receivable software applications can offer great breakdowns of options for classifying and managing vendors and other items. Many types of software packages allow customization of the system used to manage accounts receivable.
Another purpose of electronic bookkeeping is the use of computers and software to eliminate certain manual tasks, such as check writing and account balancing. For example, once a company finalizes its accounts receivable for a period, checks are needed to send payment, and accounts must be cleared to recognize payments. Accounts receivable software packages generally allow you to print checks using your computer; Once printed, the system also records check payments electronically and finalizes payments. At this point, accountants are simply needed to review the accounts, make sure they are balanced as needed, and make sure there are no errors. That leads to another benefit to this software: electronic reporting to help balance accounts receivable in the general ledger.
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