Accounts Receivable & Collections
How to track what customers owe you, prioritize collections, and reduce days-sales-outstanding without damaging relationships.
Revenue you’ve billed but haven’t collected isn’t revenue yet. Accounts receivable tools help you see who owes you, how overdue it is, and what to do about it.
A/R aging
The A/R aging report buckets outstanding invoices by how overdue they are — current, 30, 60, 90+ days. It’s the fastest way to see where your collection risk actually sits.
A practical collections approach
- Send a friendly reminder as soon as an invoice goes overdue — most late payments are oversights, not refusals.
- Escalate tone gradually the further overdue an invoice gets.
- Offer an easy way to pay online directly from the reminder.
- Flag chronically late customers for stricter terms going forward (deposits, shorter terms, or prepayment).
Automating the follow-up
Accounting automations can trigger reminders automatically as invoices age, so collections happen consistently instead of depending on someone remembering to check.
When to write something off
If an invoice becomes genuinely uncollectible, your accountant can help you record it correctly as a bad debt rather than leaving it inflating your receivables indefinitely.
Frequently asked questions
How aggressive should collection reminders be?
Start friendly and get firmer as an invoice ages — a graduated approach preserves the relationship on a first-time late payment while still applying real pressure on a chronic non-payer.
Does A/R aging include partially paid invoices?
Yes — the aging report reflects the outstanding balance, so a partially paid invoice shows only what’s still owed, aged from its original due date.
Can I set different terms for different customers?
Yes — apply stricter terms (shorter due dates, upfront deposits) to customers with a history of paying late, while keeping standard terms for reliable ones.
Does A/R include rent, or just service-business invoices?
A/R covers whatever invoices your account generates — for service pros that’s job invoices, and the same reporting concepts apply to any billed-but-uncollected amount.