Within an organisation, who is typically responsible for maintaining Accounts Receivable records and collections?

Introduction / Context:
Accounts Receivable represents money owed to the business by its customers. Properly maintaining AR records, posting invoices, recording receipts, and following up on overdue accounts are essential tasks that directly affect cash flow and working capital. This question checks whether you know which part of an organisation normally owns this responsibility.

Given Data / Assumptions:

• The organisation has separate functional departments such as finance, HR, production, and possibly a dedicated AR or credit control team.
• Invoices are raised on customers and payments are received through cash, cheque, or bank transfers.
• Someone must maintain accurate ledgers and oversee collections.
• External auditors review but do not perform day to day posting of transactions.

Concept / Approach:
In most organisations, Accounts Receivable is part of the finance or accounting function. A dedicated AR or credit control team records invoices, allocates receipts, manages credit limits, and follows up on overdue balances. They work closely with the sales team but remain within the finance structure to maintain independence and control. External auditors, HR, and production staff have different roles and do not typically handle daily AR maintenance.

Step-by-Step Solution:
Step 1: Recognise that maintaining AR involves accounting skills, system access to financial ledgers, and knowledge of credit policies. Step 2: Identify which department usually manages financial records and controls: the finance or accounting department. Step 3: Note that many companies have a specialised Accounts Receivable team or credit control team as part of finance. Step 4: Understand that external auditors only examine records periodically; they do not maintain day to day transaction entries. Step 5: Conclude that the correct answer is the dedicated AR or credit control team within the finance department.

Verification / Alternative check:
If you look at organisation charts and job descriptions for AR roles, you will find titles such as Accounts Receivable Executive, Credit Controller, or AR Manager listed under the finance head or CFO. Their responsibilities include invoice processing, customer statement reconciliation, and collections. HR, production, and external auditors have their own separate mandates, confirming that AR maintenance is a finance function.

Why Other Options Are Wrong:
External statutory auditors are independent professionals engaged to review and opine on financial statements; they do not enter daily AR transactions. Human resources handles hiring, training, and payroll, not customer ledgers. The production department focuses on manufacturing or service delivery operations, not maintaining customer accounts.

Common Pitfalls:
Some candidates may think that because sales staff interact with customers, they must also maintain AR records. While sales teams may provide information on customer issues, the formal accounting entries are usually controlled by finance. Another pitfall is assuming that auditors are responsible for everything related to accounts when, in reality, they only review work done by internal teams.

Final Answer:
Accounts Receivable is typically maintained by the dedicated Accounts Receivable or credit control team within the finance or accounting department.