Spot On QuickBooks Accounts Receivable Procedures

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Spot On QuickBooks Accounts Receivable Procedures

Having proper accounts receivable procedures is very important for any business. The receivables are money owed to the business and properly accounting for and collecting that money is essential to staying in business and earning a profit.

New Customer Approval

New customers that wish to be billed at a later date for goods and services should be approved for credit. This will involve them opening an account by filling out an account application for approval. Provide a copy of the terms and conditions for payment along with the application to the customer.

The account application form should capture all information needed for billing and for initiating collection procedures if account becomes delinquent. Also obtain some background information to check the customer’s payment history.

After a new customer is granted approval the account should be set up in QuickBooks as a new customer account. The information captured on the account application should be used to set up the new customer account and manage QuickBooks accounts receivable.

Billing Customers

When a sale is made an invoice should be generated for the amount of the sale.  The invoice will be automatically debited to the customer’s account as a QuickBooks accounts receivable.

As payments are received they should be entered in QuickBooks as well, they will be credited to the customer’s account.  It is important to apply each payment to the specific invoice or invoices that are being paid per the customer's instructions. 

At the beginning of the month run a QuickBooks Accounts Receivable report to see all invoices that have not been paid from the prior month(s).  

Monthly Statements

Generate monthly statements for any accounts with a balance due on the first day of the month and mail or email it to the customer. Customers with zero balances do not need a statement sent.

The statement acts as a reminder to customers that their account is due (or past due). It also allows the customer to reconcile all payments made to their account and any outstanding invoices.

Aging of Accounts Receivable

Businesses need to age their accounts receivables as 30, 60, 90, etc. days old and establish a policy of when accounts are written off as bad debts. Once written off the account moves to collections and is no longer included in the accounts receivable balance.  

QuickBooks accounts receivable procedures should be in writing and must be consistently followed by accounts receivable employees. If and when exceptions are made or changes are made, it should be the owner/manager to make the decision.









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