What is the typical first step in the AR process?

In the accounts receivable (AR) process, the typical first step involves invoicing the customer after goods or services are delivered. This step is crucial because it initiates the billing cycle, formally notifying the customer of the amount owed for the goods or services received. An invoice serves as a legal document that provides a clear record of the transaction and specifies payment terms, which is essential for both the seller and buyer to ensure agreement on what is owed.

Once the invoice is sent, it starts the process of tracking payments and managing the accounts receivable. This initial action establishes a timeline for when payment is expected and sets the stage for any subsequent steps, such as following up on overdue accounts or reconciling the accounts receivable ledger. The other options, while related to important aspects of the AR process, occur either before or after the invoicing step and are not foundational to initiating the AR cycle.