What is an accounts receivable audit and how is it performed?

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Accounts receivable auditing is a necessary process in companies to know their financial status. Thanks to them, you can know how many clients owe you money, if they are paying on time, the accounts that are in arrears, etc. In this Moonflow collections software post , we provide you with more details about accounts receivable auditing , including how a collection account is audited and how an accounts receivable software can help you.

What will you find in this text?

What is accounts receivable audit?

Accounts Receivable Audit Methods

How do you audit a collection account?

1. Review financial records to identify accounts receivable

2. Check customer payment records

3. Analyze the company's internal procedures for recording and controlling sales and collections

4. Check billing dates

5. Analyze the age of the balances

6. Conduct a detailed analysis to detect possible irregularities

7. Risk assessment

8. Document the findings

How can collections software help you perform an accounts receivable audit?

What is accounts receivable audit?
Let's start by defining what an accounts receivable audit is . We can buy uae email database define it as a process by which records of the debts that customers have with the company are reviewed and evaluated.

This process is intended to verify that these accounts are correctly recorded, evaluate the probability of collection, identify possible errors or fraud, and ensure that the financial information is accurate and reliable.

To facilitate understanding and implementation, many companies choose to document procedures and findings in an accounts receivable audit PDF , providing an accessible and structured format for review and analysis of these documents.

Accounts Receivable Audit Methods
Accounts receivable audit methods are essential to detect potential irregularities and financial risks associated with accounts receivable . Their use ensures the transparency and accuracy of the company's financial statements.

These methods include analytical tests, such as horizontal analysis, which compares financial data from different periods to detect possible trends or variations. Management indicators, such as accounts receivable turnover or average collection period, are also used to assess the effectiveness of accounts receivable management.