Whats the word on Accounts Receivables Finance? (Career wise)
I saw some accounts receivables position at HSBC, careers in corporate finance, and then ran across another at a non-bank company.
From what I have read so far skills developed = financial analysis, business analysis, decision making. Though I am not quite sure to what extent since each place has their own procedures.
Anyone here have experience in this area or know of anyone in it?
Cheers!
At a bank it's probably dealing with AR factoring. Outside of a bank it could be managing the factoring process or a bunch of AR processing staff if they tried to give AR Supervisor/Manager a fancy title (yes, I actually saw what appears to be an AR Supervisor job req with that title in my 30 second google).
I don't know anyone in it so your guess is as good as mine, but your estimate of skills acquired is probably about right. Maybe some exposure to risk management but would imagine the bulk of that is done during the sales/contract negotiation process.
processing invoices basically
Accounts receivable is the area of a finance function that deal with money flowing into the business.
Raising sales invoices Credit control At certain companies - managing invoice finance
The other side of this is 'Accounts payable' which is the area that deals wih money flowing out of the business
Processing purchase invoices Paying purchase invoices
It's a transactional area and not considered skilled or interesting work by any means
I'd avoid corporate AR if I were you. Your job could likely get automated. source: We recently let go of 4 "AR specialists" because their jobs were automated.
any way to jump ship into something else after 1-2 yrs of AR?
From corporate AR, may be tough. But in reality, it's all about who you know and the quality of work you have done. If you are a good worker, and let your boss know you'd like to become more well rounded and gain experience in other areas of finance/accounting, then you will likely be able to.
I would avoid AR in general. If you are in corporate finance (industry) it might be a good rotation to go through (i.e. 6 months) just to learn about it because it is an important function accounting wise. However, you don't develop really great skills there and I have known AR folks who have had a tough time getting into better roles. Plus AR tends to pay less in general as well.
There are a lot of roles in corporate accounting that are really useful to spend a marginal amount of time in (6 months to a year) but not to develop a career in. Areas that come to the top of my head are fixed asset accounting, external reporting, AR/AP, internal audit (some exceptions, GE/HON), consolidations, revenue accounting, etc..
All are useful roles and as a finance professional can be very beneficial in giving you a better understanding of financial systems and accounting for your industry. But I would be wary of of spending a lot of time in those areas. However, if you spend 3-5 years in accounting roles and 20+ years in finance roles you will probably be more well-rounded than just 25 years in finance roles.
Best roles in corporate finance in my opinion are the following (not particularly in order)
How would you tier these in terms of exposure within the firm (ability to move up the food chain faster) or exit ops? In my experience I would put them in 4 groups generally. Opinion?
Tier 1- High exposure to top executives (typically promoted more quickly) and strong exit ops.
Tier 2- Strong exposure (Typically have the ability to move around the firm/not pigeon holed)
Tier 3- Decent exposure (exit ops tend to lean to more of the same jobs as skill sets are viewed as more niche)
Tier 4- Normally Pigeon holed, limited growth and exit ops
This is just based on my experience, I am sure every company is different.
A/R is a dead end job that doesn't really prepare you for anything else and offers limited exits. I don't consider myself a snob by any means but that's probably the only corp fin role (aside from A/P) that I'd avoid. It's quite a bit of drudge work: applying payments, doing collections work, getting credit approvals, and running aging reports to show who owes what. It never lets up and there's no glory in it. Say you collected a payment on an invoice that looked as if it were going to be a write off, do you get so much as a pat on the back? It's more like why didn't you collect this sooner since it was owed?
Also, depending on how important your customers are (how much $$ they bring in), you'll be under pressure to meet your collections targets while abiding by their own internal payment terms, which may be completely contrary to your company's-so expect your bosses harassing you to collect stuff within a timeframe they KNOW your customer won't recognize. You won't win in those instances.
And have fun telling your Sales dept. that you won't extend credit to a customer who's made a huge order because of their risk profile. Prepare for salespeople going over your head, demonizing you, and raising hell to get these approvals.
Finally, those jobs are usually the first to get outsourced writ large. The pay's already terrible, and it's better to have people in developing countries who'll take the abuse without complaining.
Now I have seen people successfully transition from A/R to something more meaty, but it usually involved going to a P/T degree program and heavy internal networking/job posting. The only "good" thing I'd say about this job is that it lets you develop relationships w/ Front Office people or those w/ some influence, so if they like you and can vouch for you internally you might be able to make your way to something else. But that's more the exception than the rule. My last boss came over from A/R and she was a manager there for 10 years(!) before finding an opening.
It's a reasonable way to get your foot in the door but as others have pointed out it is one of the least desirable finance/accounting roles. It is possible you get some "phone experience" making collection calls.
In A/P you see the money flowing out of the business which I would say is a bit more interesting, depending on the nature of the business. Many/most businesses have a broader range of input costs than final product sales eg 5 different raw materials get turned into one product.
A good tell as to the quality of the job would be whether it absolutely requires a 4 year degree or is open to an associates. Check LinkedIn of your potential boss and co-workers if you can.
These type of jobs can be extremely heavy in data entry.
I started in A/P and 3 years later am now in FP&A at a different company.
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