Why is excellent A/R execution important for a business?

This is an excellent question. 'Cash is King' and that is what the A/R department hones in and must focus to collect. A/R is listed as an asset on the balance sheet, but if a customer has not paid and has been extended credit, there is always the chance it can become a liability due to nonpayment. The A/R and Collections area is responsible for collecting the cash flow for the company to pay the expenses and debt. Without the payments to pay the output, I would not have a job.

The interviewer is testing your business understanding of the A/R function. There are a few reasons why organized and accurate accounts receivable execution is essential.

1. Integrity and ethics associated with maintaining exceptional business records
2. Ensuring customers are paying their bills means your business is receiving income
3. Every business needs accurate records to know where the company is at financially
4. Enables easier reporting when the A/R function is exceptional

"I believe in the phrase, 'Cash is King,' and that is where an accounts receivable department comes in. A/R is an asset on the balance sheet, but if a customer has not paid and has been extended credit, there is always the chance it can become a liability due to nonpayment. The A/R and Collections departments are responsible for collecting the cash flow for the company to pay the expenses and debt."