Accounts receivable is money owed to you by your customers for goods or services that have been delivered or used, but not yet paid for. Accounts receivable are created when a customer purchases your goods or services but does not pay for them at the time of purchase. In other words, a sale has been made but you have not yet collected payment from your customer. Businesses with accounts receivable typically issue invoices for their products or services at a later date. The invoice represents a legal obligation for the customer to pay for the goods and services based on the terms agreed upon at the time of the sale.
Accounts receivable is recorded in a business's accounting data as an asset. Once an invoice is sent to your customer, your customer will typically pay that invoice within 30 days to 60 days. Effective accounts receivable management is crucial to a business's financial health. If a business has too many accounts receivable, it may not have the cash it needs to pay its bills today. It's important to manage accounts receivable in order to maintain a strong business.
QuickBooks Online is # 1 in cloud accounting for small businesses1. It organizes all of your accounting data in one central location so that you can easily manage your accounts receivable, accounts payable, invoicing, bookkeeping, and more. Access the A/R Aging Report (accounts receivable aging report), create and send invoices, and send reminders to customers with past-due payments anytime with QuickBooks Online. QuickBooks Online makes managing accounts receivable easy. Try it for free today.
QuickBooks Online makes accounts receivable management easy
Accounts receivable management is a critical component to managing your business's financial health. It's important to setup a process for regularly invoicing your customers and reviewing your accounts receivable (money that customers owe you). The frequency at which you send invoices typically dictates the frequency at which you will receive payment. You can speed up accounts receivable by invoicing customers regularly, accepting cash and credit cards, and by using discounts to incent early payment. Effective accounts receivable management will help you collect money from your customers so that you have enough cash on hand to pay your bills and your vendors on time.
QuickBooks Online is the easy way to automate and manage accounts receivable. You can set QuickBooks to automatically send invoices, track payments, and generate reports. Easily identify your delinquent accounts and send statement reminders to customers with late payments. Access your A/R Aging Report (accounts receivable aging report) anytime and from anywhere to know which customers are late with their payments and by how many days. QuickBooks makes accounts receivable management easy.
When you create an invoice for a customer, QuickBooks automatically creates an account receivable for you. When the customer pays, you will enter the payment on the Receive Payment screen located at Customer > Receive Payment. Simply choose the customer, the invoice number, and the amount paid, and QuickBooks Online will properly reduce the amount of the customer's accounts receivable. If you want more information about a customer, you can see each customer's invoices and payments in the Customer Center. Go to Customer > Customer Center and select your customer to see any outstanding invoices, payments received, payments due, and more. Try QuickBooks Online and see how it makes accounts receivable management easy.