An account receivable worksheet is a document that keeps a record of all the amounts that a company is owed by its customers. In simpler terms, it refers to the amount that has yet to be paid by the customer in exchange for services or products provided by the company. Payment invoices for the customers are generated and their record is kept at the company’s information desk, but they are still not paid.
A helpful tool for businesses also…
Account receivable is a very helpful tool for businesses to track outstanding bills owed by their customers and make sure that no bill is beyond the due date. These bills or invoices are made when businesses make sales and sell their products to customers. Invoices are the payments that customers pay back to the business within the due timeframe. These payments are paid either in multiple installments or in single.
Businesses track the outstanding bills of every customer to make sure that no bill is overdue, and collections should be made within the designated time frame.
Every business or company have related policies and procedures in place to facilitate their customer. Payment procedure may change from one business to another i.e., some businesses require payment immediately after the purchase while other businesses may allow payment within a due timeframe. The account receivable worksheet keeps the business on its toes regarding outstanding cash from every customer and tries to keep the cash inflow.
Wonder what to include in the worksheet?
Contents of the account receivable worksheet depend on the policies of the company that maintains them. These contents are devised regarding facilitate customers and are given as follows,
- Customers’ information: name, account, national identity card number, profession, and other information regarding a customer is presented.
- Bills: invoice of the payment, and its registration number are added to the worksheet. It includes the amount owed by the customer to the business.
- Payment procedure: procedure of payment is mentioned clearly. It can either be a single installment or multiple installments spanned over a definite period.
- Payment status: status of each invoice is mentioned before the name of the customer. Payment status is either outstanding or paid or in process or it can be overdue.
The worksheet is comprised of columns where each column represents the above-mentioned categories and required data is filled according to the sales made. These columns can be customized further to include more information either about the customer or documentation required for making sales.
It is an easy tool…
An account receivable worksheet is considered important in managing a business because of the ease it provides to the business regarding cash flow. Its importance in the field of business can be evaluated from the following points,
- It keeps an organized record of every invoice related to every customer thus, it has the tendency to record a large amount of data in a repeated fashion.
- Strict actions can be taken against customers with overdue payments or warnings can be issued.
- Instead of using savings, businesses can rely on due payments for future investments and production.
- It keeps business afloat during off-seasons.
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