Accounts Receivable Reports

Accounts Receivable (A/R) reports are usually monitored for cash-flow purposes.

You can find out the amount of your client’s original invoice, how much the client still owes, and when the last payment was made. If needed, you can send clients reminders – Billing – Past Due Notices.

The A/R reports should also be checked as part of your year-end, to determine whether any amounts outstanding should be declared as bad debts. Keep in mind that changes to the Limitations Act have significantly shortened the timeframe for collecting your receivables.

In my bookkeeping practice, I have found in A/R reports quite a few instances of negative A/R balances. Most often these are the result of posting errors for payments or billing write-down errors. These errors are easy to correct when current, which is why the reports should be checked often. It is far more difficult to correct older negative balances from closed months/years, as you can no longer easily adjust the original entries.

As always, I invite your comments and suggestions for future post topics. Next week – Work-in-progress reports.

Clyde