Understanding Accounts Receivable

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An invoice sent to a client for project work done and with an amount due is a receivable. Slow receivables reduce profits, funds available for needed or desirable capital expenditures and resource improvements, and increase the cost of doing business. Thus, it is important to manage receivables and track individual invoices for timely collections. In addition, it is a good practice to include a ‘Stop Work’ clause in your contracts to safeguard your interests. Projects will be profitable only if the client pays you on time for the work done.

 

BillQuick Online contains many tools to help you track and analyze receivables and work-in-progress with reports, billing-related memos, journals and collections conversations. Client investment is a good indicator of your accounts receivable.

 

Client Investment = Unpaid Invoices + Work-in-Progress – Retainer

 

When the client investment is too high, you need to remind the client for payments. You can obtain this information from the Investment Summary (WIP + A/R) or A/R Reconciliation reports.  

 

The aging reports in BillQuick Online include client sections that list aged project invoices. Client contact details and the project manager display prominently. You can print aging reports using one or more filters:

 

 

If you need an aging summary, such formats are also available. You can drill-down to the details while previewing the report. In addition, you can identify payment deficiencies and other receivable information from other A/R reports such as Client Snapshot with AR Aging, Billings Summary by Month, Cash Receipts, Statements, Collections, etc.

 

A companion report, Gross Margin, can influence decisions about which past due accounts to pursue first. The report lists gross margin percentage by invoice.

 

BillQuick Online comes with the following system accounts:

 

Account ID

Account Name

Account Description

Account Type

11000

Accounts Receivable

Accounts Receivable

Accounts Receivable

12000

Undeposited Funds

Undeposited Funds

Other Current Asset

12010

Legacy Payments

Legacy Payments

Other Current Asset

20000

Accounts Payable

Accounts Payable

Accounts Payable

2100

Payroll Liabilities

Payroll Liabilities

Other Current Liability

2200

Customer Deposits/Retainers

Customer Deposits/Retainers

Other Current Liability

25100

Main Service Tax Payable

Main Service Tax Payable

Other Current Liability

25200

Main Expense Tax Payable

Main Expense Tax Payable

Other Current Liability

25300

Service Tax Payable

Service Tax Payable

Other Current Liability

25400

Expense Tax Payable

Expense Tax Payable

Other Current Liability

3000

Opening Balance Equity

Opening Balance Equity

Equity

40000

Default Item Income Account

Default Item Income Account

Income

40199

Default Discount Account

Default Discount Account

Income

60001

Default Item Expense Account

Default Item Expense Account

Expense

6560

Payroll Expenses

Payroll Expenses

Expense