How to Review Open Invoices and Send Payment Reminders and Balance Forward Statements in QuickBooks Online
August 01, 201803:50 PM
August 01, 201803:50 PM - edited September 13, 201809:58 AM
Being proactive means keeping a close eye on open invoices. Knowing what customers owe you, developing clear policies, and planning accordingly are incredibly for sustaining your business.
In QuickBooks Online, there are a few tools and simple review techniques you can incorporate into your workflow that will help you professionally manage open and overdue payments.
Why do I need to review open invoices?
The primary benefit is obvious – you want to get paid. But managing pending payments isn't only about keeping the lights on. If overdue payments pile up, they can become an avalanche that spills over into the rest of your business, stopping your operation dead in its track.
Be proactive with your accounts receivable and get ahead of issues before they impact your cash flow. Designate an individual on your team to handle this process. Establish a regular review process and set policies for how to handle late payment using the available tools in QuickBooks.
Get started reviewing open and overdue invoices
You can view all open invoice activity in the “All Sales” section of the Sales tab. The total number of open invoices and total amount owed to you are displayed in the orange and grey header boxes.
You can also chronologically sort invoices by “Status” from the “Invoices” tab.
There’s also a report for reviewing open invoices. Go to the Reportstab and search for “Open Invoice Report.” Set the report to criteria to “All Dates” and “Current” so you see all current outstanding invoice.
This report is effective because you get the data you need (invoice number, due date, and net terms by customer ) in a very clean format. You can save the report as a PDF (click the small gear icon in the corner) and send it to the member(s) on your team who need this information to follow up.
You can even schedule this report to go out on a regular basis. Start by emailing yourself a copy once a week and adjust as needed so you’re always on top of your accounts receivable. To schedule the report, click the “save customization” button in the corner.
Give the report a name (in this case, I went with something simple: “Open Invoices Weekly Report”) and decide who gets access to the data.
Go back to the Reports Tab and open your Custom Reports sub-tab. Your new report will be at the top of the list. Click the edit button next to the report to pull up this screen:
Enable the “Set email schedule” option and set the recurrence for how often you’d like this report emailed to you and your team.
By the way, you can use this workflow to schedule anyreport in QuickBooks Online.
Send Payment Reminders and Balance Forward statements as Batch Actions
Now you know how to stay on top of open invoices. What can you do to gently remind customers with outstanding balances?
There’s no single way to manage this process, but a rule of thumb is to practice restraint. Be firm but empathetic. Maintaining a positive relationship with your customers is arguably more valuable to your long-term success than the dollar amount you’d get from playing debt collector.
Start with an email. While you’re on the Customers sub-tab, sort the list by clicking the orange “Overdue” or grey “Open Invoice” boxes in the header. This filters for customers with open or overdue invoices. Check the boxes next to each customer you want to contact, click the Batch Action drop-down at the top, and select “Email.”
Craft your email with care. If you’re sending anticipatory emails for soon-to-be-overdue invoices, be polite and remember that they have until the deadline (Net Payment terms) to pay. If you’re writing about recentlyoverdue invoices, be professional but firm. Add the word “Overdue” somewhere in the subject line.
If you want to go straight to Reminder Messages, that’s another good option. Though less personal, they are a more efficient (and direct) way to tap your clients. You can edit your default email reminder message by clicking the Gear Icon (), selecting Accounts and Settings, the “Sales” Tab and then scrolling down to “Reminders.”
To send this default reminder message, go back to the CustomersTab and again filter the list for “Overdue/Open Invoice.” On each customer line, you will see a “Send Reminder” action. Do this for every customer with an overdue invoice.
If these go unanswered, you can send a stronger message – Balance Forward We definitely recommend trying the first two before moving onto this option.
Go to the Customers sub-tab. You can either click the drop-down arrow on each customer line to create a single Balance Forward statement or check the box next to each customer and select “Create Statements” from the Batch Action menu.
Any other tips I should keep in mind to be successful?
Integrating regular reviews into your operations will prevent work from piling up. The payment process doesn’t always go smoothly, but you have the tools and techniques to make it less of a hassle.
If you’re at a point where you're dedicating large chunks of time managing your accounts payable, step back and evaluate your current procedures. What’s your relationship like with your clients? Is there an obvious reason why some customers aren’t paying on time? Do you make paying for invoices easy? How have you managed overdue invoices in the past? Is this the best practice going forward?