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Setup an effective Accounts Receivable process and collect money faster!

Are you having trouble collecting on your invoices? Set a fool proof plan in place to collect payment faster.

Step 1: Review.

Review your current Accounts Receivable (A/R) balance. Pull an A/R aging summary and make sure all invoices on this report are correct and accurate. Write off uncollectible (once you are certain without a doubt you will not be able to collect), receive payment for invoices already paid but not marked paid in Quickbooks and remove any incorrect invoices in current year only. Note: never delete invoices in a period where the tax return has already been filed. This will effect the numbers used to file your return.

Step 2: Setup Quickbooks payments.

This allows customers to pay via credit card or ACH in the email with their invoice. Making it easy for customers to pay will mean you get paid faster. Start here to setup payments within Quickbooks Online. There are fees included with this service. Current fees:

Step 3: Turn on automatic late fees.

Automatically assigning late fees to invoices encourages customers to pay. You can even including messaging on your invoice that a late fee will be assessed after a certain amount of days. If you have a conversation with that customer, you can choose to remove the late fee from their invoice.

To set this up in Quickbooks Online, go to Settings – Account & Settings – Sales – Late Fees – turn on “Default charge applied to overdue invoices”

Step 3: Setup Invoice Reminder Emails

Sending your customer reminder emails will ensure they have received the invoice while also reminding them the invoice has not been paid. Having this work automatically saves you time in needing to review what invoices have not been paid and going through the process of sending it to the customer.

To set this up in Quickbooks Online, go to Settings – Account & Settings – Sales – Reminders – Set up invoice reminder emails)

Step 4: Always collect an email address.

Make it a company policy that anyone allowed terms but have an email on file. Then enter that email address in the customer details. This will help the processes above do their job and make your collection process easier. Create a process to always collect an email address when possible.

Step 5: Batch send invoices and statements regularly.

Even though you have now already setup automatic email reminders for your customers, create a practice of batch sending invoices and statements regularly - suggested once or twice a month.

To do this in Quickbooks Online:

· For invoices: Sales – Invoices – Select all overdue - Batch Actions – Send Invoices

(Can also Print Invoices from Batch Actions to send via snail mail)

· For statements: New (+) – Statement – Adjust date – select All customers – Save and Send.

These steps are focused on Quickbooks Online customers. A similar process can be put in place for any accounting system that you use. Make it easy for customers to pay and remind them regularly. The more you can automate, the more time you can save.

Reach out if you need help with this process!


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