All businesses need to have good and organized practices for their accounts receivable procedure.
This is the money that is being owed by the customer and it is quite necessary to maintain accurate accounting records for collection to keep the business operations and profitability.
Invoices, payments received, sales receipts, and deposits are the main financial transactions that can be recorded using QuickBooks, and you’ll also have the ability to use estimates and statements.
This option is quite very effective because it is not often used but necessary to be aware of. You must keep a record of your debtors, how much is being owed and the due date for collection.
This article covers the necessary steps on how to manage account receivables in QuickBooks.
How To Manage Account Receivables In Quickbooks
New Customer Approval
A new customer’s credit request to pay for goods and services at a future date should be authorized.
They will have to submit an account application for approval to start a new account. Give the customer a copy of the payment terms and conditions together with the application.
All the information required for billing and starting collection processes if the account becomes past due should be captured on the account application form. Also, customer payment history should be checked.
The account should be set up in QuickBooks as a new customer account once they have been approved. To enable new customer accounts and handle QuickBooks accounts receivable, the data collected on the account application should be used.
Billing Customer
An invoice should be generated for the number of sales made. As a QuickBooks accounts receivable, the invoice will be automatically debited from the customer’s account.
Payments should also be recorded into QuickBooks as they come in so that they can be credited to the customer’s account. Each payment must be applied to the particular invoice or invoices that are being paid in agreement with customer instructions.
Run a QuickBooks Accounts Receivable report at the beginning of each month to view all invoices from the previous month that have not yet been paid.
Monthly Statement
Monthly statements and email forwarding should be generated for any accounts with a balance due at the beginning of the month. The statement is not necessary to be sent to customers with no outstanding balances.
Customers receive a statement as a reminder when their account is overdue. It can also be used to compare any unpaid debts with payments made to their account.
Accounts Receivable’s Age
Businesses must set a policy for when accounts are written off as bad debts and age their accounts receivable as 30, 60, 90, etc. days old.
Once written off, the account is sent to collections and is no longer counted toward the total amount of accounts receivable.
Employees that work with QuickBooks accounts receivable processes must follow them consistently and in writing. It should be up to the owner/manager to decide if exceptions or changes are made.
Other Topics on Receivables Management
- The Role of Receivables Management in Cash Flow
- 10 Best Practices for Effective Receivables Management
- How to Calculate and Analyze Accounts Receivable Aging
- Strategies for Improving Accounts Receivable Turnover
- Understanding Accounts Receivable: A Beginner’s Guide
- Effective Strategies for Receivables Collection
- An Introduction to Receivables Financing
- Accounting for Receivables: A Comprehensive Guide
- The Comprehensive Guide to Managing Receivables in Business
- 5 Best Free Accounts Receivable Software for Small Business
- 10 Best Accounts Receivable Management Software for Small Business
- How to Collect Receivables Faster in 2023
- How To Start An Accounts Receivable Business
- 5 Tips for Small Business Accounts Receivable Management
- Cost Associated With Receivables Management
- How Much Does An Accounts Receivable Manager Make
- How to Efficiently Manage Your Business Accounts Receivables
- Role of Artificial Intelligence in Receivables Management
- How Blockchain Technology is Transforming Receivables Management
- Future of Receivables Management
- Protecting Your Business Against Receivables Fraud
- How to Handle Delinquent Accounts: A Legal Perspective
- Legal Aspects of Managing Receivables
- Technological Tools for Streamlining Receivables Management
Conclusion
You’ll have to spend some time keeping track of your Accounts Receivable and the payments that come in because businesses need money to stay afloat.
The focus placed on delinquent invoices and unpaid customer balances often dictates a business’s success.
It might be overwhelming to maintain the accounts receivable data, make sure that every payment is accurately processed, documented, and communicate the status of outstanding balances. QuickBooks accounts receivable reporting is a good software for small businesses.