Accounts Receivable Job Functions: Complete Guide to Duties, Skills & Salary

Whether you're researching an accounts receivable job or hiring your first accounts receivable specialist, understanding the core receivable duties helps set realistic expectations.

This guide provides an overview of how accounts receivable jobs vary across a wide range of industries, the primary skill sets required for accounts receivable roles and the performance metrics that define success in this field.

Quick note: Nickel is a payment processing platform built for businesses processing serious payments, offering free ACH processing with QuickBooks integration. If you’re an AR professional looking to reduce payment processing fees, get started today or reach out to schedule a demo and see how Nickel can help your business.

The 7 Core Accounts Receivable Job Functions

Accounts receivable specialists manage money that customers owe your company for goods and services that have been provided. AR professionals bridge the gap between sales and customers' payments actually reaching your business bank account. 

Having a skilled AR staff can help you manage your cash flow, improve your financial health, and ensure that you’re up to date on legally required financial reporting. 

So what, exactly, is your accounts receivable team responsible for?

1. Invoicing & Billing

The core job function of an accounts receivable specialist is creating and sending customer invoices at project milestones or at agreed-upon deadlines.

This responsibility includes maintaining the accounts receivable ledger with accurate financial records and managing the billing system to ensure pricing, payment terms, and customer information are correct before sending.

2. Payment Processing & Application

Once invoices go out, accounts receivable clerks track payments that will come in from various channels: checks, ACH transfers, credit card payments, and wire transfers. They apply these customer payments to the correct invoices, manage cash posting, and reconcile with bank statements to maintain accurate financial records for both you and your clients.

3. Collections

Accounts receivable specialists are also responsible for following up on past due accounts and delinquent accounts.

This happens through payment reminders, phone calls, and sometimes negotiating payment plans. 

AR professionals should know how to prioritize collection efforts based on outstanding balances and customer payment history, escalating severely delinquent accounts to management when necessary.

4. Account Reconciliation

When payments don't match expectations, AR professionals are the ones responsible for  investigating the discrepancies.

They match payments to customer invoices, resolve billing disputes, and process credit memos when appropriate. 

The goal is to ensure customer accounts reflect what's actually owed.

5. Credit Management

Before extending payment terms to new and existing customers, accounts receivable specialists evaluate creditworthiness through financial data and credit reports.

They set credit limits and payment terms based on this analysis. This can involve placing credit holds on accounts with outstanding payments that become severely overdue to prevent additional exposure.

6. Financial Reporting & Analysis

The accounts receivable role includes managing and tracking overdue bills based on age to prioritize collection efforts. They often separate outstanding invoices using 30-day segments. Unpaid invoices will be put into different categories: current, 1-30 days, 31-60 days, 61-90 days, and 90+ days overdue. 

These reports track AR metrics like Days Sales Outstanding (DSO) and support financial reporting for month-end close activities. Experienced AR professionals don't just generate reports. They analyze patterns and identify trends.

7. Customer Communication

Throughout all of this, AR professionals respond to customer inquiries about invoices and coordinate with the accounting team to resolve issues before escalation.

Strong customer relationships facilitate smoother collections. Clients pay more reliably when they maintain positive relationships with their AR contact.

That’s consistent no matter what kind of business you run. But the particulars of what you’ll need will differ depending on your sector.

How Accounts Receivable Duties Vary by Industry

Your accounts receivable needs will change based on what sector you’re in and, relatedly, who your clients are. If you’re a clothing retailer, you’re going to operate differently than if you run a healthcare business or a construction entity. 

So let's talk about the variations you'll see based on industry, the specific processes an accounts receivable specialist might handle depending on where they work, and what skills could be particularly useful for your AR staff.

Construction and Real Estate Development

Progress billing is common here. Instead of invoicing when a project is complete, AR professionals invoice based on percentage of completion. This practice is standard to ensure a more predictable and stable income stream for companies working on large, lengthy projects.

This sector typically uses payment retention. When sending out progress payments, project managers will often withhold 5-10% from contractors. This is intended to ensure that contractors actually finish the job they’ve been hired for. 

But retention can cause disputes if terms are not agreed upon in advance or if the payment is miscalculated. AR specialists must track these retention balances separately and ensure they're released when contractual conditions are met and know how to deal with clients who have not experienced this practice before.

Manufacturing and Distribution

AR professionals working for manufacturers, wholesalers, or distributors face particular challenges around the amount of transactions they must process and track.

High transaction volume in this industry means that AR professionals need to know how to work at scale without sacrificing precision. The average distributor sends out thousands of invoices each month. Their AR professionals spend a lot of time simply processing transactions. AR specialists in this sector need strong organizational skills to manage volume without errors piling up. 

Thin margins make timely payments critical. When operating margins can be as low as 5%, every day of collection delay has an outsized impact on profitability. A 10-day improvement in DSO can mean the difference between profit and loss for the quarter.

Early payment discounts like 2/10 net 30 terms (2% discount if paid within 10 days) are common tools to improve cash flow by incentivizing faster payment.

Software and Technology Companies

AR specialists working for SaaS companies, software vendors, or technology service providers deal with mostly automated processes. This means your staff will be able to spend more time on updating customer information, assisting with compliance processes and pursuing collections.

Recurring billing through automated subscription charges allows your staff to spend less time on manual invoice creation and focus more on ensuring payment methods on file remain current. Credit cards expire, bank accounts change, and allowing your staff to spend more time updating this information means money will get to your account sooner.

Failed payment recovery becomes a specialized skill for these sectors. When credit card transactions decline, AR professionals will need to oversee automated email sequences to recover payment before subscriptions are suspended. This requires different skills and processes than traditional collections, in which a service has already been provided.

Revenue recognition complexity adds an accounting wrinkle. Subscription businesses receiving annual prepayment must account for deferred revenue properly, and AR professionals will work closely with accounting teams to ensure compliance.

Professional Services

AR professionals working for consulting firms, law offices, marketing agencies, or accounting firms handle client billing differently than product-based businesses.

Retainer billing is standard. Client deposits are held in trust accounts and drawn down as work is performed. AR professionals track retainer balances and alert clients when additional funds are needed before work continues.

Scope disputes happen frequently in professional services. While communications skills are vital for all AR personnel across industries, these skills are particularly relevant for AR specialists working in professional services. As clients question billable hours or claim work exceeded agreed-upon scope, diplomatic communication skills and thorough documentation will help defuse tense situations and protect your company’s reputation.

Essential Skills for Accounts Receivable Roles

As we noted above, the ability to communicate clearly and firmly but diplomatically is important for all AR professionals. We’ll take a closer look at why and examine other skillsets that are helpful for specialists in this area.

Communication Skills

Collections require strong verbal communication skills for potentially difficult phone conversations with customers about overdue payments. Written communication matters equally for professional payment reminders that are assertive but respectful. AR professionals must request payment without damaging customer relationships, especially with major accounts.

Attention to Detail

Maintaining accurate financial records across hundreds or thousands of accounts requires focused precision. A single digit error in invoice amount, payment application, or account reconciliation cascades into customer disputes and financial statement errors. Catching invoice errors before they're sent saves customer relationships and prevents time-consuming corrections later.

Time Management

Managing hundreds of customer accounts requires tracking multiple deadlines, prioritizing collection efforts, and balancing daily transaction processing with proactive collections work.

Effective AR specialists develop systems to ensure nothing falls through the cracks, automate processes when possible and know how to structure each day. They know which accounts need attention this week, which customers pay reliably without reminders, and where to focus energy for maximum impact.

Analytical Thinking

AR aging analysis reveals patterns worth noticing: which customers consistently pay late, whether DSO is improving month over month, and which accounting records need attention.

AR experts track metrics, identify trends, and use data to guide decisions about credit policies and process improvements. The best AR people are half accountant, half detective.

Software Proficiency

Accounting software varies by company size, but QuickBooks is widely used by small companies. NetSuite serves many mid-market companies while SAP and Oracle handle enterprise needs. Ensuring your AR professionals know how to navigate these platforms will improve your cashflow and collections processes.

Payment processing platforms for ACH and credit card processing are increasingly important for companies looking for simple ways to collect money. Nickel can help companies save time on their AR processes by allowing easy payments via a simple, streamlined link. With free ACH and QuickBooks integration, Nickel allows businesses to get paid quickly while offering your customers easily understandable ways to pay bills.

Collections tools like Tesorio, Gaviti, and Billtrust help larger accounting teams automate payment reminders and track communication with customers. Firms using AR automation can process invoices faster and increase team productivity.

Career Path and Salary Benchmarks

The accounts receivable career path has clear progression with increasing responsibility and compensation as professionals rise through their career. Industries that rely heavily on their AR teams or have processes that are specialized for their sector will pay a premium for their accounts receivable staff.

Entry-Level: Accounts Receivable Clerk

AR Clerks handle transaction processing, posting customer payments, and basic reconciliation.

Salary: $36,000 to $51,000 annually according to Salary.com. An average hourly rate of $21/hour ZipRecruiter's data.

Education: Associate's degree preferred but not required.

Career timeline: Most AR Clerks advance to specialist roles within 1-2 years with strong performance.

Mid-Level: Accounts Receivable Specialist

AR Specialists handle collections, complex reconciliation, and maintain customer relationships with delinquent accounts. This is where the job gets interesting.

Salary: $52,000 to $78,000 annually per Glassdoor. Industry variation makes a significant difference here.

Education: Associate's or Bachelor's in Accounting/Finance preferred. Experience can substitute for formal education. Many AR specialists advance from clerk positions through demonstrated competence.

Career timeline: 3-5 years at this level before promotion to manager.

Senior-Level: Accounts Receivable Manager or Officer

AR Managers oversee team leadership, process optimization, strategic collections planning, and credit policy development.

Salary: $73,000 to $110,000 annually according to Glassdoor's 2025 data. Median compensation of around $100,000, according to Salary.com

Education: Bachelor's in Accounting or Finance required. CPA or MBA preferred for larger companies and finance department leadership roles.

Career progression: The full path typically takes 5-7 years total: AR Clerk (1-2 years) → AR Specialist (3-5 years) → AR Manager.

Smaller companies promote faster due to fewer qualified candidates and more growth opportunities. Larger companies have more structured career paths with slower advancement but higher ultimate compensation.

Performance Metrics That Define AR Success

AR professionals are evaluated on quantifiable metrics that directly impact company cash flow.

Days Sales Outstanding (DSO)

DSO measures the average days to collect payment after a sale.

Formula: (Accounts Receivable ÷ Total Credit Sales) × Days in Period

Benchmark: 30 to 45 days for most industries, though this varies by standard payment terms and industry. The lower the DSO the better. 

Collection Effectiveness Index (CEI)

CEI measures how well the AR team collects money owed, independent of sales volume fluctuations.

Formula: [(Beginning AR + Sales - Ending AR) ÷ (Beginning AR + Sales - Ending Current AR)] × 100

Target: 95%+ indicates an effective collections process.

A company can have improving DSO but declining CEI if sales growth masks collections problems. CEI reveals the true health of the collections process.

AR Aging Buckets

AR aging reports categorize outstanding balances by how overdue they are: 0-30 days (current), 31-60 days (requires payment reminders), 61-90 days (requires phone calls), and 90+ days (severely delinquent, potential legal action).

Healthy distribution: 80%+ in 0-30 day bucket, less than 5% in 90+ days.

When 20%+ of AR sits in the 90+ day bucket, serious collections problems exist. Accounts this old have high probability of becoming uncollectible.

Bad Debt Rate

Industry average is 1.5% of receivables written off as bad debt, though this varies by industry and credit policies. High performers maintain bad debt ratios of 0.7% or less, while underperformers see 4.32% or higher.

Every 1% reduction in bad debt flows directly to the bottom line. For a $10M revenue company, reducing bad debt from 2% to 1% means $100,000 additional profit with no additional sales required.

Common Challenges AR Professionals Face

Understanding the challenges helps both job seekers set realistic expectations and employers structure effective AR teams.

Manual Processes Consume Too Much Time

Creating invoices, sending payment reminders, and posting payments manually consumes 10-20 hours weekly for AR clerks managing even moderate transaction volumes.

Manual processes create inefficiency, increase error rates, and limit AR team capacity as the business grows.

The solution is automation. Invoice generation triggered from shipping confirmations or project milestones. Email reminder sequences at scheduled intervals. ACH auto-posting when customers pay electronically.

Process automation doesn't replace AR professionals. It frees them from data entry to focus on relationship management and complex collections. 91% of mid-sized businesses using automated AR systems report improved cash flow.

Collections Conversations Feel Uncomfortable

Calling customers about unpaid invoices feels uncomfortable for many AR professionals, especially early in their careers.

Collections calls can be awkward. Customers sometimes become defensive. AR specialists often worry about damaging relationships the sales team has built. This discomfort leads to delayed collections action, which reduces effectiveness and allows accounts to age unnecessarily.

Given that 93% of businesses experience late payments from customers, effective collections processes are critical.

Solutions that work: Send automated payment reminders before calling (many customers respond to email). Establish clear payment terms upfront so collection conversations become enforcement of agreed terms rather than awkward requests. Provide professional scripts that maintain positive relationships. Offer early payment discounts like 2/10 net 30 so customers pay early to capture the discount.

Payment Processing Fees Add Up

Credit card transactions cost 1.5-2.5% of transaction value. ACH fees vary but add up quickly for high-volume businesses.

For companies with thin margins, payment processing fees can consume 10-15% of net profit margins.

Solutions exist. Incentivize customers to pay via ACH instead of credit cards. For businesses processing large B2B payments, platforms like Nickel offer a simple, unified way to accept payments, QuickBooks integration and free ACH which can save you thousands of dollars annually.