Accounts receivable measures the money that clients owe to the business for goods or services provided. On the other hand, accounts payable refers to the money a company owes to its suppliers or vendors for goods or services received. As a business owner, staying on top of your accounts receivable is essential because you need to get paid. You may run out of money if you fail to manage accounts receivable. This is the reason you should seek help from an experienced bookkeeper in Melbourne who can help you keep track of your accounts payable and accounts receivable.
What is Accounts Receivable?
Accounts receivable is the money that clients owe to the company. When you or your bookkeeper sends an invoice to your clients for the services or goods you provided, it becomes an important part of your accounts receivable, until it is paid. Accounts receivable indicates both the money owed and the process of getting paid.
How to Improve Accounts Receivable for Your Company?
When a company runs out of money, this is where business fails. If you want to grow and have a bright future, then you must have a sound accounts receivable process. Bookkeepers for small businesses can help you accomplish this goal by following the steps given below:
• Updates Contact Information of Your Customers
Are you keeping the contact list and billing address of your customers up-to-date? The most common reason why your customers are not paying you on time is that maybe you are sending invoices to the wrong contacts. Invoices are unpaid because your customers are not receiving them. Here, bookkeepers of Melbourne will ensure to keep the customer directory up-to-date, which will give you peace of mind knowing that invoices will be sent to the right customer.
• Invoice Customers Electronically
Most often, bookkeepers recommend using an online system to chase up your unpaid invoices electronically and automatically. Bookkeepers or accountants for small businesses can suggest what software would be the best option for your business. You can go with their suggestions.
• Get Paid
It is important for you to keep it simple for your customers to have different payment options to get paid on time.
As a business owner, you might not have enough time to send invoices to your customers or make multiple phone calls to your clients, right? Whatever the reason is, that is why you should choose accounting and bookkeeping services so that professionals can chase up every single invoice on your behalf.
When you get paid on time, it will help you improve the cash flow of your company, but sometimes it may seem awkward when you have to chase up your clients yourself when you don’t have a bookkeeper to do it for you. Not only will outsourcing to a professional help reduce your to-do list but it will also help maintain a positive relationship with your clients.
Accounts Payable vs. Accounts Receivable
• Accounts Receivable: It indicates the money owed to the business for services or goods but not yet received. While businesses wait for invoices to be paid, they are mentioned on the balance sheet as an asset.
• Accounts Payable: It differs from accounts receivable. It refers to money that the company owes to suppliers or vendors. Accounts receivable refers to assets whereas accounts payable indicate current liabilities.
Benefits of Accounts Receivable
• If you want to get paid sooner, then accounts receivable management is important. Invoicing is an important part of receiving payments from customers on time.
• Inaccurate accounts receivable can put pressure on the business’s finances and can lead to bad debts. A properly managed accounts receivable can reduce bad debt difficulties.
• Management of accounts receivable allows business owners to track clients with repayment history. It allows you to decide whether you should provide client credit or not.
• Tracking unreceived payments is one of the most vital parts of accounts receivable management. With accounts receivable, you can track outstanding client payments.
In conclusion, it can be said that seeking help from a bookkeeper for accounts receivable management would be the best option to improve the cash flow of your company. To manage your accounts receivable, you can choose Reliable Bookkeeping Services provider.
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