What is accounts receivable and how do I manage it?
Accounts receivable is the money your customers owe you for work you’ve already completed or products you’ve already delivered. When you send an invoice and the client hasn’t paid yet, that amount is accounts receivable. It sits on your books as an asset until the payment arrives.
This matters because AR represents revenue you’ve earned but can’t spend. You finished the project, you sent the bill, but the cash isn’t in your bank account yet. A business can be profitable on paper and still have cash flow problems if too much money is tied up in unpaid invoices.
Managing accounts receivable starts with timely invoicing. Send invoices as soon as the work is done. Every day you wait to bill is a day added to when you get paid. Make invoices clear about what the charge covers, when payment is due, and how to pay. Unclear invoices create questions, and questions create delays. If creating and tracking invoices takes time away from your actual work, an invoicing service can handle the process so you stay focused on serving clients.
Use an aging report to track what’s outstanding. This report groups unpaid invoices by how long they’ve been open. Current, 1-30 days past due, 31-60 days, and so on. Review it weekly. An invoice that’s two weeks old needs a gentle reminder. One that’s 60 days old needs a direct conversation. The aging report shows you exactly where to focus so nothing slips through.
Follow up consistently. Most late payments happen because people get busy, not because they’re avoiding you. A friendly email at 7 days past due catches most of these. A phone call at 30 days handles the rest. Build a system for these reminders so they happen automatically rather than relying on memory.
You can also shorten the cycle by adjusting payment terms. Net 15 gets you paid faster than Net 30. Accepting credit cards and ACH payments removes friction that might slow down a check. Some businesses offer a small discount for early payment, which can make sense when cash flow is tight.
Keeping your books organized makes all of this easier. When your small business bookkeeping Long Island is up to date, your aging reports are accurate, invoices are tracked, and you can see at a glance who owes what. Without that foundation, managing receivables becomes guesswork.
Long Island's Small Business Bookkeeper
The Next Step:
A Quick Conversation
Tell us about your business and what you need. We'll ask a few questions and give you a straightforward quote.
More Questions
What is the best business structure for a consultant, LLC or S-corp?
Both work, and the right choice depends on your income level and tax situation. The key difference from a bookkeeping standpoint is that an S-corp requires you to run payroll for yourself, which adds complexity and cost.
Read answerHow do I track restricted versus unrestricted funds for my nonprofit?
Use QuickBooks classes or sub-accounts to separate funds based on donor restrictions. The method you choose matters less than applying it consistently from the moment a donation arrives through when you release the restriction.
Read answerShould I hire a local bookkeeper or an online one?
The question isn't local versus online. What matters is expertise, responsiveness, and familiarity with your state's tax rules. A virtual bookkeeper based in your area can offer both local knowledge and modern convenience.
Read answerDo I need a bookkeeper or can I do it myself?
DIY bookkeeping works when your business is small and transactions are few. It breaks down as volume grows, reconciliations slip, and the hours spent on books take you away from billable work. The real question is whether your time is better spent elsewhere.
Read answerWhat are the signs that my books are a mess?
Unreconciled accounts, uncategorized transactions, balances that don't match bank statements, and personal expenses mixed with business spending are the clearest signs. If you can't produce a current profit and loss statement, your books need attention.
Read answerHow do I set up QuickBooks Online for my business?
Start with the right plan, then customize your chart of accounts to match how your business actually operates. Connect your bank accounts and set opening balances correctly. Most mistakes happen with the chart of accounts and opening balances, not the initial setup screens.
Read answer
