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
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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 14 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.