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Getting Accounts Receivable Organized

Getting Accounts Receivable Organized

With the busy season for many industries starting up again, it’s important that you ensure your accounts receivable is organized and ready to track your company’s invoices sent to customers. We’ve put together this quick list to help you optimize your accounts receivable, and ensure that you will collect more of what you are owed, while minimizing your risk of having accounts going unpaid.

Clear Billing Periods

Clear billing periods work two ways; first your customer will know exactly when they are being billed for the products or services that you are providing them. This is the critical first step to ensuring that you are paid on time, and not chasing unpaid accounts. Secondly, clear billing periods will allow your accountant to make many forecasts, such as income, while also allowing you another opportunity to connect with your customer to sell more.


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Statements & Invoices

Sending your customer a monthly statement of purchases, or a monthly invoice, is always recommended, as it leaves a paper trail in the case an account goes unpaid. It also allows your accountant to track money flowing through your business, as each dollar will be able to be tracked right back to the invoice payment it has originated from.
To get started with your own invoice system, follow these easy 6 steps in this article.

Use Technology

Using technology to track unpaid and paid invoices, past due dates, emails regarding payments, and anything else, is easier than ever. With so many “Client Relationship Management” systems (also known as CRM systems) on the market, with integrations into accounting software, your business can have a flawless process set in place, recording each time you reach out to your customer. A system like this will not only allow your business to be more efficient, but will also allow your accountant to better understand how your business is operating, allowing them to give you more valuable advice to grow.

Credit Policy

Having a credit policy is a critical part to ensuring the overall health of your accounts receivable. Are you giving product or service to your customer on credit? Do you have established credit limits for each customer to minimize your risk of the customer defaulting on payments? Do you have a procedure in place for accepting credit applications? These are just a few of the questions that your internal credit policy needs to address to protect your business. We strongly suggest that you consult with a professional accountant about your credit policies, as being too generous with credit can lead to cash flow problems in your business. A professional accountant will be able to look at your financials and help determine safe levels of credit that you can offer your clients.

Late Payments

Although late payments can be considered part of your accounts receivable, they are a whole other situation. It’s important that once a payment is late that your company immediately follows up with the customer, to ensure that payment is on its way. There may be money issues that your customer is facing, or perhaps they simply forgot to send the payment; therefore it’s important to stay professional and courteous. Having a firm and clearly defined late payment procedure can help you recover more outstanding invoices, than being too soft and not having a procedure in place. It’s suggested that a week before a payment is due, to send a polite reminder to your customer that payment is coming; this way if a payment is late, there are few excuses that they can have. It’s also suggested to follow up every several days after the initial late payment call; the longer the account remains unpaid, the less likely it is you will ever see payment. Finally, it’s a good idea to offer payment plans to those of your customers that you believe can qualify; however, you should consult with a professional accountant to look into the figures and make a fair solution for you that works for both you and your customer.


The dreaded filing; this is a crucial step in the accounts receivable process. It’s important to keep files dated correctly, grouped together and organized in an effective manner. For example, if you are sending customer invoices out monthly, first group the files by month, then by ‘paid’ and ‘unpaid’, and then by company or product. This will allow you, and your accountant, to find the information needed more efficiently and ensure that all the data is present. You will save more time, have more accurate financial information, and will have less unpaid invoices. Also, in the case of a CRA audit, you will be extremely relieved knowing that all your sales and income documents are in one place and organized.

THIS ARTICLE deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other
appropriate professional advice should be sought before acting upon any of the information contained therein.
Although every reasonable effort has been made to ensure the accuracy of the information contained in this letter, no individual or
organization involved in either the preparation or distribution of this letter accepts any contractual, tortious, or any other form of
liability for its contents or for any consequences arising from its use.

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