305: Understanding Your Accounts Receivable Balance Whether You Are Starting A Business Or Side Hustle, A Solopreneur, Entrepreneur, Mompreneur, Freelancer, Bookkeeper, Virtual Assistant
- Financial Adventure, LLC
- May 21
- 8 min read
305: Understanding Your Accounts Receivable Balance Whether You Are Starting A Business Or Side Hustle, A Solopreneur, Entrepreneur, Mompreneur, Freelancer, Bookkeeper, Virtual Assistant, Business Owner, Or Self-Employed
Your accounts receivable balance is an important number to know throughout the course of your business. It will help you when you are projecting how much cash you’ll be receiving in the future, but if you don’t have an accurate accounts receivable number to begin with, you could run into issues with your projections. Your accounts receivable balance is also included on your balance sheet in the asset section. When you get familiar with your accounts receivable report and understand how you should take care of items that are inaccurate, you’ll definitely help ensure your financial reports are accurate. In today’s podcast episode, I’m covering how you can clean up your accounts receivable balances so that you can feel confident in the amount of money you’ll be receiving from your customers. Whether you are starting a business or side hustle, you’re a self-employed individual, a solopreneur, entrepreneur, mompreneur, freelancer, small business owner, a remote, virtual, online, or in-house bookkeeper, or a virtual assistant or VA; there are many instances where you may need to clean up your accounts receivable accounts, and when you stay on top of any adjustments that need to be made, it will make cleaning up your accounts receivable report easier for you. These tips are essential whether you are using a computerized software system like QuickBooks, Xero, Wave, FreshBooks, or HoneyBooks for your business finances; or doing your bookkeeping manually with an Excel spreadsheet or even a Google Document…
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Show Notes:
Your accounts receivable balance is an important number to know throughout the course of your business. It will help you when you are projecting how much cash you’ll be receiving in the future, but if you don’t have an accurate accounts receivable number to begin with, you could run into issues with your projections. Your accounts receivable balance is also included on your balance sheet in the asset section. When you get familiar with your accounts receivable report and understand how you should take care of items that are inaccurate, you’ll definitely help ensure your financial reports are accurate. In today’s podcast episode, I’m covering how you can clean up your accounts receivable balances so that you can feel confident in the amount of money you’ll be receiving from your customers. Whether you are starting a business or side hustle, you’re a self-employed individual, a solopreneur, entrepreneur, mompreneur, freelancer, small business owner, a remote, virtual, online, or in-house bookkeeper, or a virtual assistant or VA; there are many instances where you may need to clean up your accounts receivable accounts, and when you stay on top of any adjustments that need to be made, it will make cleaning up your accounts receivable report easier for you. These tips are essential whether you are using a computerized software system like QuickBooks, Xero, Wave, FreshBooks, or HoneyBooks for your business finances; or doing your bookkeeping manually with an Excel spreadsheet or even a Google Document…
Welcome Back…Whenever you have receivables from customers, there’s a chance that you may need to make adjustments to the original balances that they owed. Today I want to talk about some of the best practices when it comes to cleaning up your accounts receivable balances, and the first part is being aware of what is making up your accounts receivable balance. When you look at your balance sheet, you’ll see your total accounts receivable balance in your asset section. To see the details on what is making up this number, I recommend that you run an accounts receivable aging summary report. You can find this report in QuickBooks Desktop by going to the reports tab in your top menu bar and selecting customers and receivables and then accounts receivable aging summary. If you are using QuickBooks Online, you will go to the reports tab, and under who owes you, you’ll see the accounts receivable aging summary report there as well. When you run this report, you’ll be able to see each customer and their balances, which make up the total accounts receivable amount that shows up on your balance sheet. I always recommend that my clients look this report over on a monthly basis so that they can clean up any balances that may not be correct.
You may also find that there are items on your accounts receivable report that are over thirty days past due. If you have a customer that has not paid their invoice on time, make sure that you have a procedure in place to remind them that their balance is due. You can send statements to help remind them, or you may need to have a collection process in place to receive these payments. Don’t forget that you always have the option to access finance charges on any invoices that have not been paid. Just make sure you are letting your customers know about these policies in advance.
If you’re an accountant or high-stress professional, you want to start enjoying your life more, both at work and at home. You’ve likely built a successful career, but at what cost? The problem is you’re so buried in deadlines and to-do lists, there’s no time or energy left for the things that really matter. You’re great at managing clients, deadlines, and numbers, but your own stress, time, and well-being, well, they always seem to come last. The constant pressure leads to burnout, guilt, and feeling like no matter how much you do, it’s never enough. I see this all the time. As a CPA with over 20 years of experience and a Certified Coach, I’ve helped high-achieving professionals like you go from stress and burnout to a more integrated and balanced lifestyle using The RE*INVENTION™ Process. This process helps you reduce stress, reclaim your time, and finally build a healthier, happier, more balanced lifestyle without sacrificing your success. The truth is, stress doesn’t go away on its own, and eventually, the cost isn’t just exhaustion; it’s your health, your relationships, and your love for the work you once enjoyed. If you’re ready to build a life you don’t need a vacation from, it’s easy to get started. First, schedule your Complimentary Stress Audit & Clarity Session where in just one session, I’ll help you pinpoint what’s really draining your time and energy, create a personalized action plan to help you simplify your life, reclaim your time, and increase your productivity so that you start living with more energy, focus, and freedom. You don’t have to keep doing this alone. I can help you customize a plan to stop the overwhelm and start enjoying your life again. Go to www.FinancialAdventure.com, click on the Work With Me button, and book your free session today. Let this be the moment you stop just surviving and start living with more control and finally enjoy a more integrated and balanced lifestyle again. In the meantime, check out all the other resources and solutions on my website that you can immediately apply to your life so you can stop being stressed out and feeling like you're never doing enough and instead breathe a sigh of relief at the end of the day knowing you've accomplished enough and can enjoy your life more.
Some of the issues that I often see clients have with their accounts receivable report is when they have a duplicate customer, and the invoice is issued under one of the customer accounts, and the payment is received under the other account. This produces a credit and an amount due on separate lines of the accounts receivable report. If you have this showing up on your report, you can either reapply the payment to the correct customer, or you may want to merge the two customers. To merge the two customers, you will want to edit one of the customer’s accounts to match exactly how the other customer account was set up. When you do this, QuickBooks will let you know that there is another customer with this name, and it will give you the option to merge the two accounts into one. Another issue that I see come up for many clients is when you are looking at your accounts receivable report, and you see a customer with a zero balance. The reason this customer is still showing up on your accounts receivable report even though they have a zero balance is because QuickBooks was not able to link all of the transactions together appropriately. To fix this, you will want to go to receive payments and apply the credit and or payment to the invoice. Once you do this, QuickBooks has everything linked correctly, and your customer with the zero balance should no longer appear on your accounts receivable report. The last issue that I would like to mention is when the balance that is showing up on your accounts receivable report is no longer going to be paid. If you determine that the balance is uncollectible or was recorded in error, you will want to issue a credit memo and then apply that credit memo to your original invoice or invoices so that the customer then has a zero balance.
Now that you understand how you can easily clean up any issues that may come up on your accounts receivable reports, make sure that you are setting up a process to review your accounts receivable report on at least a monthly basis and block off the time in your calendar. This will not only help you keep your financial statements accurate by having the correct balance in your accounts receivable account, but it will also help you to receive payments in a timely manner. When you are on top of your accounts receivable report, you will be able to notify your customers of any past due amounts quickly so that you can continue to have a cash flow that supports your business operations. The older the receivable gets, it is often harder to receive payment on what is due. If you are struggling with your accounts receivable procedures or if you want help setting up efficient processes or strategies in your business, sign up for one of my free consultation sessions. You can go to www.FinancialAdventure.com and click on the work with me button.
And, you know I’m going to ask…what’s at least one thing you will take away from this episode that will help your business succeed and grow your bottom line? If you want accountability or support, visit www.FinancialAdventure.com. You’ll find links to join our private Facebook community, connect with me on LinkedIn, and discover more free resources to help you reduce stress, boost productivity, and build a business and life you truly enjoy. I’ll see you there.
