How to rethink and refresh your AR department

The accounts receivable (AR) department is a vital part of an organization’s financial health, ensuring timely payment of invoices and maintaining accurate records of receivables. However, any sudden change in business environment, size or organizational structure can drastically affect how efficiently the AR department operates.  

Why it matters: With proper planning and execution, credit professionals can take charge and restructure their AR department.  

Step #1: Assess the current state of your AR department 

Assessing your AR department helps to identify existing strengths, uncover hidden challenges and ensures that changes align with long-term goals and organizational efficiency. Taking a closer look at team structure, roles and core competencies can help you uncover areas for improvement.  

“Pay attention to both verbal and non-verbal cues and watch how teams interact naturally throughout the workday,” Brett Wegner, director of accounts receivable operations at Summit Companies (Mendota Heights, MN) said during the Credit Congress session, Under Construction: Tips and Strategies for Building from Scratch or Restructuring Your Credit and A/R Departments.   

For an overall performance review, conduct a thorough departmental audit of existing AR processes and identify pain points in all functional areas. Benchmarking current performance metrics against industry standards and gathering stakeholder feedback will give you more insight into departmental performance. 

Work culture encompasses the shared values, beliefs, attitudes and behaviors that shape how employees interact with each other and the organization. Evaluating work culture is essential during a department’s reconstruction, as it directly impacts the overall efficiency of the AR department.  

Pro tip: Talk to your team. People are more likely to share valuable insights when they feel genuinely heard. Whether through one-on-one conversations or group discussions, engaging directly with your AR team can identify underlying issues and skill gaps. By identifying areas for improvement, you can enhance their performance and support their professional growth. 

Listen to your AR team without judgment and welcome diverse perspectives. This approach will help drive meaningful change. For example, if you want to improve workplace culture, start by envisioning what it should look like—and ask your current team what kind of culture they want. Then, embody those values to help bring that vision to life.  

Step #2: Develop a plan 

Once you have a baseline assessment of current AR processes and pain points, define measurable objectives that align with broader company goals. Prioritize initiatives based on their potential impact and resource requirements. By creating detailed timelines, you establish clear ownership and accountability. 

“Build in regular checkpoints to measure progress and adjust as needed,” Wegner said. “Try to avoid reinventing the wheel—instead, study and adapt proven models to accelerate progress and sidestep common pitfalls. Take advantage of existing frameworks with demonstrated results to save valuable time and resources.” 

Pro tip: Leverage technology. Look for technologies that enhance existing workflows and clearly communicate that the goal is to support—not replace—your AR team. Automation and artificial intelligence (AI) free your AR team from tedious, manual tasks, allowing them to focus on solving complex challenges and contributing to strategic initiatives.  

To find the most suitable technology, measure the return on investment (ROI) through time saved and error reduction. Also, build strong relationships with your internal technical resources, as it will give you more leverage in getting your technology launched. The Expo Hall at Credit Congress offers credit professionals the opportunity to explore solutions and build connections around emerging technological innovations. If you are looking for technology, budget to attend the 2026 Credit Congress in St. Louis and scour the expo floor for demos, ideas and conversations with others about what tech they use.

Step #3: Get the plan approved 

To get your plan approved, present a compelling business case to leadership, supported by clear ROI projections to demonstrate how it aligns with the company’s objectives. Start by addressing each issue impacting your AR department’s performance, and list what resources are needed, with a clear cost breakdown and expected cash flow improvements. Make sure to point out possible challenges and get executive support to lead the initiative. Also, set clear goals and milestones to keep track of progress. 

Pro tip: Pick your battles. Not every challenge requires immediate action, and some initiatives succeed only when the timing and conditions are right. “Strategic leaders evaluate which issues truly demand their attention,” Wegner said. “So, conserve energy for high-impact opportunities and focus on changes that deliver measurable business results.” 

Step #4: Execute the plan 

Executing strategy demands discipline and adaptability. Tracking both small and big wins, and measuring key metrics against your starting point, helps identify opportunities for growth. Investing in training and mentoring builds the skills your team needs. Meanwhile, keep improving processes by regularly using feedback and results. 

Pro tip: Be authentic. Authentic, transparent leadership builds trust between you and your AR team, which significantly enhances work culture. This means aligning your actions with your values and being open about mistakes. By modeling vulnerability, you create a safe environment where team members feel comfortable being themselves. “If I’m the authentic version of myself, day in and day out, I can manage a department much easier because I don’t have to think about it and just be,” Wegner said. 

The bottom line: Whether your company is undergoing a merger or facing a specific challenge, rebuilding your AR department is fundamentally about enhancing roles, expanding learning opportunities and supporting career growth. Take advantage of outside sources that can help you be more efficient through external processes and AI in these new platforms.