Accounts receivable (AR) refers to the money that a business is owed by its customers for goods or services provided but not yet paid. As an example, if you’ve issued an invoice to a customer but they haven’t paid you yet, the amount would be included in your accounts receivable.
Use Bookipi’s easy-to-use invoicing software to keep track of your overall accounts receivable amount. You can also send automated payment reminders to customers who haven’t paid yet using our combined invoice generator and organizer.
By keeping a close eye on your AR balance and following up with customers who are behind on their payments, you can ensure that your business stays financially healthy and solvent.
What is Accounts Receivable (AR) vs Accounts Payable (AP)?
Accounts receivable (AR) refers to money owed to your business, while accounts payable (AP) refers to money owed to vendors, suppliers, or other creditors. An accounts payable account can include expenses such as rent, utilities, or inventory purchases that have been received but not yet paid.
How do you record invoices in accounts receivable?
The amount payable on an invoice issued to a customer is recorded in your accounts receivable balance. A spreadsheet or ledger can be used manually, or simple software like Bookipi can make the accounts receivable management process more efficient.
Bookipi can also assist with other aspects of your financial operations, such as expense tracking, reconciliation, and reporting. With Bookipi, you can have confidence in your financial management processes, and focus on what you do best – running and growing your business.
What happens to accounts receivable when invoices are paid?
An invoice payment is recorded as a reduction in your accounts receivable balance when a customer pays it. You will have less debt from your customers as a result. Any unpaid invoice balance is still included in your accounts receivable balance until an invoice is fully paid.
Managing accounts receivable effectively can make a huge difference in the success of your small business.
With Bookipi’s easy-to-use invoicing software, you can streamline your financial processes, stay on top of your accounts receivable and preserve your cash flow.
Get on top of accounts receivable with the easiest invoicing tool
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