5 Challenges with Email and Correspondence for Accounts Receivable

accounts-receivable-paidCorrespondence to and from the accounts receivable (AR) department is critical to record and archive alongside invoices for historical reference.

Miscommunications regarding receivables due to improper documentation will quickly and unnecessarily strain the client relationship while also impacting positive cash flow.

Reports provide insight into outstanding accounts, but they cannot provide the granular context to AR workflows. Too often, the context is found in the countless emails sent between your staff and your customers. How long, where and what are the best practices for these records to be kept?

Accounts Receivable Retention Requirements

Below is a table that illustrates retention requirements for accounts receivable documentation:

Records Retention Requirement (years)
Accounts, charged off 7
Accounts, payable ledger 7
Accounts receivable 10
Accounts receivable ledger 10
Balance sheets 5
Bank deposit records 6
Bank reconcilement papers 8
Bank statements 8
Bills collectible 7
Bills of sale of registered bonds 3
Bill stubs 7
Bonds canceled 3
Bonds registered Permanently
Bonds, sales or transfer 15
Budget work sheets 3
Building permits 20
Capital stock bills of sale Permanently
Capital stock certificates Permanently
Capital stock ledger Permanently
Capital stock transfer records Permanently
Cashbooks 25
Cash receipts & disbursement records 10
Cash sales slips 3
Cash slips 3
Charge slips 10
Check records 7
Check register 10
Checks, dividend 10
Checks, expense 10
Checks, paid & cancelled 9
Checks, payroll 7
Checks, voucher 6
Checks, warrants Permanently
Correspondence, accounting 5
Correspondence, credit & collection 7
Cost account records 7
Customer ledger Permanently
Donations 7
Drafts paid 8
Earnings register 3
Entertainment, gifts & gratuities 3
Estimates, projections 7
Expense reports, departmental 7
Expense reports, employees 7
Financial statements, certified Permanently
Financial statements, periodic Permanently
Fixed capital records Permanently
General cashbook 25
General journal Permanently
General journal supporting papers Permanently
General ledger Permanently
Notes, canceled 10
Note ledgers Permanently
Payroll register 7
Petty cash records 3
Plant ledger Permanently
Profit & loss statements Permanently
Property asset summary 10
Royalty ledger Permanently
Salespeople commission reports 3
Stock ledger Permanently
Tabulating cards & magnetic tape 1
Traveling auditor reports 15
Trial balance, accounts receivable 3
Trial balance sheets Permanently
Uncollectible accounts 7
Work papers, rough 2

We recommend that you have your CPA and your attorney review your AR records retention timetable before putting it into practice.

The Top 5 AR Challenges for Managing Correspondence

What if email correspondence was easily searchable alongside invoices, POs, backup and other AR related documents? Not only would the review process be more seamless for each cycle, but it also saves the AR team time, provides sales with conversation history, and enhances customer relations.

So with all these records, what are the five challenges for accounts receivable?

  1. 90% of all business correspondence is conducted via email and the email will frequently contain attachments.
  2. All correspondence with customers regarding account receivable should be considered a business record or document.
  3. Correspondence isn’t associated with the documents they reference – this can be done by invoice number.
  4. Classification, filing, and archiving email with current technologies is unorganized.
  5. Critical email correspondence isn’t integrated with existing back-end systems

Email Manager from CMA

With the right email management software the AR correspondence classification process is simple. Your AR team doesn’t have to launch another application on their desktop to document their AR correspondence. Instead, users can tag every email directly from their Microsoft Outlook interface with values pulled directly from your document management system so you can capture the account information, invoice number and any other customized information. Email Manager the automatically uploads all email correspondence in the thread, both before and after the tagged email to your document management system without any manual intervention.

What are you doing within your firm to help accounts receivable integrate, track and archive all of their email and attachments?