Day to Day Operations of a Business: Accounts Receivable

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In the previous blog, we looked at a few important points you need to know when managing your accounts payable. As mentioned, you must be able to manage both accounts payable and receivable properly as these are essential in keeping your business running.

In this blog, we’ll look at a few things you need to remember about accounts receivable.

Accounts receivable is money owed to a business by its debtors for goods and services delivered. So if your business gets paid when the job gets done or you are selling a product without credit terms then you may not have any accounts receivable. In the long run, however, most businesses do end up having some accounts receivable.

Here are some important notes you need to know when you do have accounts receivable:
• Ensure that you have a proper tracking system for your accounts receivable.
• If there is an amount due, collect as soon as possible. Remember, uncollected accounts receivable have closed many businesses due to lack of cash flow so it is very important that you collect the money that is due to your business.
• Do not let people that owe your business money to drift off. Contact with them regularly for follow-ups and ensure you get paid!

As always, if you would like expert advice on starting and running your business, please do not hesitate to contact us KD! We will be happy to work with you to ensure that you succeed!
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