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Introduction to Accounts Receivable Process Cycle The Accounts Receivable Process Cycle refers to the systematic approach businesses use to manage creditsales and collect payments from customers. This cycle begins with establishing credit policies and extends through invoicing, payment collection, and account reconciliation.
Even worse, the company’s stock price was depressed because of the company’s high DaysSalesOutstanding (DSO) , a common measure of AR management effectiveness.
When accounting departments want a quick evaluation of the health of a business, they often look at their DSO, or dayssalesoutstanding. However, dayssalesoutstanding are subject to a range of factors and targets should always be based on the wider context of the business and industry.
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