In large companies,accounts department is very big having number of employees

There are basically 2 main departments

  1. AP Process (Accounts Payable Process)
  2. AR Process (Accounts Receivable Process)

What is AR Process - AR Process (O2R Process)

 

We have studied AP Process before, 

AP Process deals with various expenses and their payments like payment to vendors,salary payment,handling travel reimbursements of employees,petty cash reimbursements etc

 

AR Process deals with Sales and Other Revenues.Hence it is mainly concerned with Making Sales and Collection of money from time from debtors, Detailed explanation is given below

 

What is O2R Process (AR Process)?

AR Process is also called O2R Process i.e Order to Receive Process

It contains all the steps starting from

  1. Receipt of Sales Order
  2. Issue of Invoice
  3. Issuing Reminder for Payment
  4. Receipt of Payment 
  5. In Case Payment short received,booking bad debts
  6. In Case Payment not received for long time,booking provision for bad debts
  1. Accounts and Finance
  2. AP and AR Process
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About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .