Maintaining Invoices Due and Payments
This is the core of your accounts receivable procedures.
Below are the basic steps to follow from the time you give the customer their invoice:-
Manual Receivables System
- Print a copy of the invoice and place it into your *Receivables file in sequential order - either by date or invoice number.
- Make a cover page on which to list the unpaid invoices. Draw up
columns to display i) the date, ii) the customer name, iii) the invoice
number, iv) the amount, v) paid date. Keep this cover page in the front
of the folder.
- When payment is received, either by cash, cheque or internet
banking, write the date it was paid into the ‘paid date’ column of the
Receivables cover page. You can also make a note (hand-written or
stamped) of the date paid on the invoice itself.
- Remove the invoice from the Receivables file and place it into a *Sales Invoice file (a file for all the paid invoices).
*You could instead have one folder with two sections i) Unpaid Invoices, ii) Paid Invoices.
This is just one method. You can change it to suit your
requirements, and indeed, design a whole different system, as long as
what you do helps you keep a handle on those unpaid invoices.
If you are using bookkeeping software that has a receivables option it
is easy to check what is due, because when you run a receivables report
it will only list the invoices that have not been paid - as long as all
the payments received have been entered into the program!
Therefore, you do not need to keep a separate receivables folder.
You can simply place all invoices directly into the Sales Invoices
folder because you will use the bookkeeping
program for the accounts receivable procedures.